The Frenchman was initially given the suspension in the wake of the Gunners' play-off first leg at home to Udinese on August 16.
However, the club appealed and the sanction was postponed but European football's governing body have reinstated it after turning down the appeal.
Arsenal were also fined 10,000 euros (£8,700) for improper conduct of their officials.
Wenger was originally handed a two-match suspension after being caught relaying messages by telephone from his seat in the stands to the technical area as he was already serving a ban carried over from last season.
"The UEFA Appeals Body has rejected the appeal lodged by Arsenal FC and Arsene Wenger against the two-match suspension handed to the manager in the wake of the English club's UEFA Champions League play-off first leg against Udinese Calcio on 16 August," said a statement from UEFA.
"Wenger will now be suspended from carrying out his duties at Arsenal's next two UEFA competition matches - the UEFA Champions League group stage games against Borussia Dortmund and Olympiacos FC on 13 and 28 September - in accordance with the decision taken by the UEFA Control and Disciplinary Body on August 22.
"The manager was awarded this suspension for not abiding by an earlier decision of the Control and Disciplinary Body during the Udinese home game - in which Wenger was serving a one-match ban imposed following Arsenal's final UEFA Champions League game of last season.
"The control and disciplinary body also fined Arsenal 10,000 euros for improper conduct by their officials during the match against the Italian team in north London."
Monday's verdict was the latest calamity to befall the beleaguered Wenger, who discovered at the weekend that he would be without star midfielder Jack Wilshere for at least another two months.
Wilshere's Gunners team-mate Aaron Ramsey admitted this afternoon the setback was "a big blow.
"I know he's been struggling with his ankle," said the Wales captain of his fellow midfielder.
"It's a big blow, he had a massive season last season.
"I thought we played pretty well in pre-season together.
"It was big blow for us and Arsenal.
"Hopefully now, he can just get back as quickly as possible."