The Buccaneers started their Second preliminary round, second leg 3-0 down from the first, leg held in the Democratic Repuclic of Congo last week.
After a competitive first half, Ouaddou's side were back in the tie when Masindi Nemtajela netted five minutes before the interval at the Orlando Stadium.
Yanela Mbuthuma was then on target in the second half with a near post header, while Oswin Appollis sealed the comeback with his strike from the edge of the area in the final minutes of the match - to take the tie to penalties.
The Linafoot side ultimately emerged as shootout winners after Mbuthuma missed the final spot-kick, in sudden death.
Speaking after the game, a proud but disappointed Ouaddou explained that Bucs did everything they could to progress to the competition proper.
He said on SABC: "It wasn't enough because we had these penalties at the end, it's part of the game. I think the guys did the job, it was not easy to come back and to score three goals, we did it.
"I have nothing to say to the guys, they were brave.
"Fantastic behaviour during the 90 minutes, it's sad for them, the effort they gave, everybody is sad for them because I think we deserved in terms of football what we showed, the football didn't win it today.
Ouaddou added: "The best team didn't go through this stage, it's like that and congratulations to the opponents and for us we are keep going to work.
"It's sad such a club won't be in the Champions League this season. I think we have such many challenges to defend and we will focus on that."
Pirates are next in action against Mamelodi Sundowns in the Betway Premiership on Saturday.
Orlando Pirates boss Abdeslam Ouaddou will be looking for a reaction from his side in their CAF Champions League First qualifying round second leg clash with Mauritian side La Cure Waves on Saturday.
La Cure Waves head coach Jerome Thomas knows his side will need another top performance if they are to see off Orlando Pirates and progress to the CAF Champions League Second qualifying round.
Mamelodi Sundowns have reportedly beaten rivals Orlando Pirates to the signature of Polokwane City and Bafana Bafana defender Thabang Matuludi for an undisclosed fee.
Orlando Pirates have announced they have reached an agreement to sign 23-year-old midfielder Bheki Mabuza from Marumo Gallants as they bolster their squad for the 2026/27.
