Dembele was an early second half substitute in France’s 1-1 draw with Hungary on Saturday but the Barcelona forward lasted for 30 minutes before going off for Thomas Lemar.
It has now been announced that Dembele was substituted because of a knee injury and will play no part for the rest of the tournament.
Dembele has suffered a host of injuries ever since he joined Barcelona from Borussia Dortmund in the summer of 2017 which has hampered his progress.
In a statement, the French federation said: “Hit to a knee on Saturday during Hungary-France (1-1), the Blues striker Ousmane Dembele is forced to forfeit the rest of the UEFA Euro 2020.
“Forced to leave before the end of the Hungary-France match on Saturday (1-1), the Blues striker Ousmane Dembele (24 years old, 27 caps) underwent radiological examinations on Sunday evening at the Budapest hospital. The recovery times are incompatible with his retention in the group currently playing UEFA Euro 2020.
“Discussions took place on Sunday between the medical staff of the France team and FC Barcelona.
“After meeting with the player and doctor Franck Le Gall, coach Didier Deschamps took note of Ousmane Dembele’s package.”
France will play their final group game against Portugal on Wednesday.