
FIFA had earlier appealed to the goodwill of clubs to release players above the age of 23 for the men's event.
The Olympic football competition is for players under 23, but each participating team is allowed to include in their squad three players over the age of 23.
But while clubs have to release players under 23, they do not have to do so for the three over-aged players.
FIFA told Deutsche Presse-Agentur dpa on Wednesday, that whilst the release of the three over-aged players is not compulsory, they hoped clubs would accept their players' call up.
"The FIFA Executive Committee made an appeal to the solidarity of the clubs in order to release these players," a FIFA media spokesperson said.
Bayern manager Uli Hoeness said the club would not stand in the way of an Olympics participation for two other players, 22-year-old Argentinian midfielder Jose Ernesto Sosa and 18-year-old Brazilian defender Breno.
Argentina had wanted Demichelis, while Lucio, who was 30 on Thursday, had been hoping to play for Brazil at the Games.
"The World Cup is there for these players, not the Olympics. The Olympics is for players under 23," Hoeness said.
Lucio said he accepted the club's decision.
The Beijing Olympics from August 8 to 24 overlaps with the start of the next Bundesliga season, and both Demichelis and Lucio would have missed the first two games of the season plus the first round of the German Cup.
Lucio has meanwhile played his last match of the current season because of a muscle tear in his lower right leg which needs surgery, coach Ottmar Hitzfeld said following Bayern's 2-0 victory over Arminia Bielefeld on Wednesday evening.