Russia's Central Election Commission (CEC) rejected Navalny's registration the day after he submitted it, citing a previous embezzlement conviction, RIA-Novosti reported.
"Firstly, a citizen who has been sentenced to imprisonment for committing a grave or especially grave crime and who has an outstanding conviction for the said crime, has no right to be elected president of the Russian federation," said CEC member Boris Ebzeev.
The decision was not a surprise. Navalny's candidacy was unlikely because Russian law prevents convicted criminals from running for public office, though Navalny and his supporters have said his conviction was politically motivated to block his presidential bid.
Navalny will appeal the commission's decision, his campaign press secretary Ruslan Shaveddinov told CNN late Monday.
Navalny would be running against incumbent President Vladimir Putin, who announced his intention to seek re-election
-- his fourth presidential bid -- as an independent candidate at his annual press conference earlier this month.
At the time, he said his aim was for Russia to have a "competitive" and "balanced" political system, but it wasn't his responsibility to create political opponents.
"I want this," Putin said, "and I will strive for a balanced political system and that is impossible without competition in the political field."
Putin has been either the Prime Minister or President of Russia since 1999.
In response to a question about why Russia lacked effective opposition leaders, Putin said most of the current opposition figures were more focused on "making noise" instead of a genuine agenda that could benefit the country.
Navalny called for a boycott of the March 2018 election in response to the CEC's decision.
"We are announcing a voters' strike," Navalny said. "The procedure in which we are invited to participate is not an election. It involves only Putin and those candidates whom he personally chose, who do not pose a slightest threat to him."
The opposition activist is widely popular among young people and has tapped into anger over a sluggish economy and endemic corruption. Navalny first rose to prominence during 2011's large-scale anti-government protests.
Expert: Putin will 'almost without a doubt' win election
Jill Dougherty, a Russia expert and former CNN Moscow bureau chief, said Navalny still has a role to play in the presidential race, though it probably won't be as a candidate.
"I think he will be a factor," she said, "but he will not be an organized participant in any electoral process. He will be kept on the outside and he is definitely opposition, so he's used to being kept on the outside."
But Navalny's support among young Russians could also play a factor in the election.
"A lot of the people who support him are very young, like 19 or 20 years old -- sometimes even younger," Dougherty said, and they have been exposed to the rest of the world and the way the rest of the world lives, and they are dissatisfied.
"Their dissatisfaction, although not very focused at this point, is a factor the Kremlin is worried about," she said. "The Kremlin is very focused on the youth and making sure that young people support Putin."
Dougherty also pointed to Ksenia Sobchak
-- a Russian socialite and reality TV star who has said she wants to challenge Putin -- as someone who could offer a liberal alternative to Putin if Navalny can't run. But Navalny's supporters wouldn't necessarily support her, she said.
"Putin will almost without a doubt win the election," Dougherty said, "because he is supported by the majority of Russians and because the system is organized ... to favor his candidacy."