The chairman of selectors Wasim Bari said Mushtaq had been omitted from the team because he was suffering from a badly bruised knee.
``The coach and the captain were unanimous that since the final Test was a crucial one, only players fully fit should be considered for selection.
``Naturally, Mushtaq was not fit. In fact, he had played at Peshawar with the knee injury,'' Bari said.
Informed sources said Mushtaq Ahmad has informed the selection committee that he was not available for the Dhaka tournament.
``He has told the selectors not to consider him because he wants to give some rest to his knee,'' sources said.
Pakistan coach Javed Miandad hinted that the Dhaka-bound squad would be selected from the 16 who will be here for the third Test.
``The programme is very hectic. Very next morning after completing the Test, we fly to Dhaka which leaves no time for the new players to join the side,'' Miandad told Dawn.
He said besides trying to win the game, his objective would also be to give some one-day practice to the players for the challenging event in Dhaka.
``I presume that the 14 would be picked from amongst the players who are here for the third Test,'' he remarked.
Also missing from the team that played a draw with Australia at Peshawar is Mohammad Zahid who had aggravated his groin injury.
But the selectors named speedster Wasim Akram in the squad despite missing the second Test because of flu and sore throat.
He will, however, have to pass a fitness test, sources said.
``I have fully recovered from fewer and sore throat. I have been practising privately at the Defence Stadium. I am anxiously looking forward to the third Test against Australia,'' former captain Wasim Akram told Dawn.
He said the Test was very important for Pakistan as the home team has not lost the rubber since 1959-60. ``I am hoping to play a leading role in keeping the record intact,'' he added.
The Pakistan cricket selectors have called four players but left it upto the team management to decide on their appearance.
Off-spinner Mushtaq Ahmad has been recalled after missing the second Test because of personal problems while pacemen Shahid Nazir and Mohammad Akram also return after spending over 12 months in wilderness.
In fact, Akram toured South Africa and Zimbabwe earlier this year but returned without playing a single match. Nazir's last Test was almost a year ago against the West Indies at Peshawar.
Left-arm spinner Shakeel Ahmad, who captured 10 Australian wickets in a four-dayer while playing for Rawalpindi, has also been named in the side.
He is all set to make his debut while the prospects of Nazir and Akram returning to Test arena remain remote.
Although the wicket has not been seen by the team management, the strategy is to play with six batsmen, a wicket-keeper and four specialist bowlers. This means that there is no place for Azhar Mahmood who failed with the bat and the ball in both the Tests.
Akram and Shoaib Akhtar was fancied to share the new red cherry while Shakeel Ahmad is expected to either share the spinning duties with Saqlain Mushtaq or Arshad Khan.
Saqlain has a slight edge over Arshad but the former failed to leave any impression over the Australians when he was smacked for 112 runs for his two wickets from 42 overs in the first Test of the current series against Australia at Rawalpindi. However, when Saqlain last played at the National Stadium against the West Indies, he had a match-haul of nine for 80 which had earned him the Man-of-the-Match award.
Team for third Test is:
Aamir Sohail (captain), Saeed Anwar, Shahid Afridi, Ijaz Ahmad, Salim Malik, Inzamam-ul-Haq, Yousuf Yohanna, Moin Khan, Wasim Akram, Azhar Mahmood, Shoaib Akhtar, Mohammad Akram, Shahid Nazir, Saqlain Mushtaq, Arshad Khan and Shakeel Ahmad.
Coach: Javed Miandad
Manager: Azhar Zaidi