Spellman will sit out the season as an academic redshirt and have four seasons of eligibility remaining.
According to Villanova's announcement, the NCAA determined that Spellman did not complete his initial eligibility requirements in time. Spellman was a fifth-year high school senior last season.
"We are extremely disappointed for Omari," coach Jay Wright said in a statement. "While we don't agree with the NCAA's decision, we are members of the association and respect it. We understand why the NCAA felt it had to rule this way.
"We will make a positive out of this for Omari. He will concentrate on his academics and individual development this season. In the long run, Omari will be a better student and player for this experience."
Spellman, a 6-foot-9 power forward from St. Thomas More School in Connecticut, was ranked No. 18 and considered a five-star prospect in the 2016 class.
Wright and athletic director Mark Jackson, who met with the media alongside Spellman on Friday afternoon, said the issue was when Spellman's freshman year of high school began.
Spellman enrolled at Middletown High School, a public school in New York, as a freshman but stayed just two months before transferring to the Hoosac School, a private school also in New York. At the private school's recommendation, Wright said, Spellman enrolled at Hoosac as an eighth-grader. Wright said the decision to change grades was for academics, not athletics.
An NCAA source explained to ESPN.com that Spellman got caught up in what is referred to as the core course timetable limitation. By NCAA rule, once an athlete begins his freshman year of high school, he then has four years to complete his 16 core courses. Spellman did complete his coursework, but by dropping back to the eighth grade he essentially took longer than the allowable four years. Though he did not even finish a semester as a ninth-grader at Middletown, the time there counted and started his eligibility clock.
Because he ultimately completed all 16 core courses in good standing he is considered an academic redshirt, under an NCAA distinction just going into practice this year. Spellman can enroll at Villanova, practice with the Wildcats and sit on the bench during home games.
"Once he started his freshman year, his clock started,'' Wright said. "So we get it. We know the rule. We understand the process. We don't necessarily agree with the decision, but we accept it. We just want to move on in a positive way.''
Wright said the Villanova athletic staff noticed the discrepancy immediately upon recruiting Spellman and brought it to the NCAA's attention, beginning the lengthy and laborious appeals process. The university, he said, worked with the eligibility center, the initial eligibility waiver committee and even appealed to Oliver Luck, the NCAA's vice president of regulatory affairs. The school also hired an outside consulting firm to help with the appeal.
But the appeal was denied multiple times.
"After the first appeal, when that was denied, I broke down in tears,'' Spellman said. "I didn't know how to handle it. Two days ago when they told me again [that the final appeal was denied], it was hard but it was more manageable. I'm going to turn it into a positive. Life goes on and I'm just going to keep on working.''
Information from ESPN's Dana O'Neil was used in this report.