The 22-year-old was the standout omission with another Seyi Ajayi, a defensive midfielder at English club, Rotherham, also missing out.
Iheanacho struggled for game time and form at his club in the 2018/2019 season.
National team coach, Gernot Rohr, had admitted that the former Manchester City striker was low on confidence.
The 23 players selected for the finals led by captain, John Obi Mikel, will travel to Egypt from Asaba on Sunday.
The Super eagles were held to a goaless draw by the Zimbabwean national team friendly match on Saturday.
They are to tackle Senegal in their final pre-AFCON friendly on June 16.
Nigeria confront Burundi, Guinea and Madagascar in that order in Group B of the continental showpiece holding in four Egyptian cities from June 21 to July 19.