Union Sportive de la Médina d'Alger (USMA) refused to play the return leg of their semi-final against Renaissance Sportive de Berkane (RSB) on Sunday evening.
The Algerian delegation left the Berkane stadium and is due to fly back to Algiers in the next few hours, according to the Algerian sports TV channel El Heddaf.
This withdrawal was to be expected. Algerian team officials had already threatened to boycott the match, if RSB played with their jersey flocked with the full map of Morocco.
Following this decision, CAF could impose further sanctions against USMA and the Algerian Football Federation (FAF). The FAF has taken the case to the Court of Arbitration for Sport (CAS) and lodged a complaint with FIFA against CAF.
Renaissance Sportive de Berkane (RSB) will face Zamalek of Egypt in the final of the African Football Confederation Cup, following USMA's withdrawal.