The Brazil international received his second yellow in his side's league defeat to Malaga and that earned him a one-match ban. However, he was handed a three-match ban for sarcastically applauding the fourth official while walking away from the pitch.
The team's appeal to the Spanish Federation against the Brazil international's three-match ban has already been rejected. The Catalan club had little hope of having Neymar's suspension overturned by Spain's Court of Arbitration for Sport (CAS/TAD) and lodged an appeal on Friday (21 April).
However, the Camp Nou outfit decided to drop Neymar to face the Champions League winners due to the "lack of reply" from TAD.
"Against the uncertainty due to the lack of reply from TAD with 12 hours to go until the game, and to focus all attention on sporting matters, the club have opted not to call up Neymar," Barcelona released a statement on Sunday.
"However, Barcelona expresses its amazement at TAD's refusal to exercise its jurisdictional functions, something which directly damages both the clubs and the competition itself."
Neymar will join Rafinha and Aleix Vidal in the list of players to miss the clash against Real as the latter two are recovering from long-term injuries. In addition to this, defender Jeremy Mathieu will miss his side's trip to Madrid as the Frenchman is struggling with a problem in his Achilles tendon.
A defeat to Barcelona on Sunday could end their chances of winning the La Liga this season. Zinedine Zidane's side are leading the table with 75 points after 31 games and are three points ahead of Barcelona with a game in hand.
Enrique has dropped goalkeeper Jordi Masip and included Barcelona B team midfielder Carles Aleñá in the squad to face the Spanish capital club.
Below is Barcelona's complete squad for the game against Real Madrid:
Ter Stegen, Piqué, Rakitic, Sergio, Denis, Arda, A. Iniesta, Suárez, Messi, Cillessen, Mascherano, Paco Alcácer, Jordi Alba, Digne, Sergi Roberto, André Gomes, Aleix Vidal –travelling with the squad- Umtiti and Aleñá.