Benzema is being investigated for his part in an alleged plot to blackmail France team-mate Mathieu Valbuena.
He was suspended from France duty in December, and the FFF confirmed he would not be selected for the Euros.
Benzema, who denies wrongdoing, said on Twitter the decision was unfortunate "for me and those who support me".
Euro 2016 takes place in France from 10 June to 10 July, with the hosts facing Romania, Albania and Switzerland in Group A.
Last month, some legal restrictions were lifted over the 28-year-old making contact with Valbuena, meaning he could play for France.
An investigating judge lifted the restraining order keeping Benzema and Lyon playmaker Valbuena apart, but the prosecutor appealed. That was dismissed in March.
The FFF, granted access to trial records, said its decision took into account "the ability of players to work towards unity" and that "athletic performance" was important but not an "exclusive criterion".
FFF president Noel Le Graet and France coach Didier Deschamps made the decision not to include Benzema for the tournament.
Former Lyon forward Benzema, who pleaded his case for a recall by posting a video on Facebook earlier on Wednesday, has not played for his country since being questioned by police in November.
Ahead of the decision, Benzema wrote on his Facebook page: "Whatever happens... Once a Blue, always a Blue!" and posted a video showing some of his 27 international goals.
Benzema played in Tuesday's Champions League quarter-final second leg as Madrid overturned a two-goal first leg deficit to knock out Wolfsburg 3-2.
Real Madrid striker Karim Benzema will not be going to Euro 2016 with France, following a decision by the French Football Federation (FFF).