Despite being given a chance to change their decision following first rejection, Pahang stuck to their guns and remained committed to only compete in the Malaysia domestic competitions.
FAM has taken this matter seriously as it impacts on the country's Member Association (MA) rankings within Asian Football Confederation (AFC).
With the AFC not allowing a replacement team if a team from a MA decline a spot in the competition, Malaysia were left with only Johor Darul Ta'zim (JDT) in next season's AFC Cup.
Having done so well in recent years to the point that Malaysia will now be given an automatic spot in the 2019 AFC Champions League, this could possible harm future Malaysia's rankings.
Pahang will now not be able to apply for the AFC Club Licence for the year 2018 and 2019, although they reserved the rights to appeal the decision.