Palomeque, 18, did not take part in the men's heats after a urine sample tested positive for testosterone.
The IOC has carried out more than 5,000 drugs tests during the Olympics and Palomeque is one of 11 athletes to be excluded from the Games as a result.
He has stated that the result was caused by him injecting himself with a homeopathic product that he believed included no banned substances.
The International Olympic Committee have wiped Palomeque from all London 2012 records.
The 2011 South American 200m champion provided the sample on his arrival in London on 26 July and was initially banned on a temporary basis.
Palomeque's coach Raul Diaz Quejada told an IOC disciplinary commission hearing that he had injected Palomeque with the homeopathic product on five occasions during July to aid his recovery from a hamstring problem.
But the IOC has said it doubts those injections were the cause of the failed test.
"Professor Christiane Ayotte, scientific expert, confirmed that, based on the composition mentioned on the packaging of the product, which does not mention testosterone as an ingredient, and due to the description of the product as homeopathic (i.e. using very diluted concentrations of its ingredients), such product is unlikely to have caused the adverse analytical finding," an IOC statement read.
The IOC have asked Columbian officials to look at the case and consider sanctions and will pass Palomeque's file to athletics governing body, the International Association of Athletics Federations.
Colombian 400m runner Diego Palomeque has been formally excluded from the Olympics after a failed drugs test.