The news is a major blow to the sport’s hopes of returning to the Olympic programme in 2016.
MLB vice-president and Team USA general manager, Bob Watson, said: "We are not going to shut down the season, that's the reality.
"Bud (MLB commissioner Bud Selig) isn't going to do that. If they (The International Olympic Committee) want to hold that against him then they have some serious lobbying to do to move him off the position."
MLB has insisted it is eager to see baseball remain part of the Olympics and last month Watson indicated the league might be open to the possibility of shutting down if Chicago or Tokyo hosted the 2016 Games.
