Batting first, Gary McClintock top scored with 45 from 58 balls (2 fours, 1 six), sharing a third wicket stand of 76 with Andrew Austin who made a patient 44.
From 107 for 2 at the half-way stage, Ireland lost their focus to finish on 184 all out – losing their final four wickets for just 10 runs.
Pembroke’s Lorcan Tucker continued his consistent form with a fluent 33 from 36 balls (4 fours), but the Irish youngsters would come to rue that late collapse.
Waringstown’s James Mitchell – playing his first game in the tournament - gave the Irish the perfect boost in their defence of 184 - dismissing Sandeep Sunar with his first ball. Sunar had shared an opening stand of 170 with Sunil Dhamala in their group win on Wednesday.
Dhamala proved a thorn yet again in the Irish side top scoring with 47 as the Nepalese showed great maturity in such a crucial run chase with so much at stake.
Raju Rijal (35), Dipendra Airee (26) and Aarif Sheikh (21) all handled the pressure as Ireland were unable to take wickets in clusters.
Rory Anders (2-22) bowled tightly yet again – finishing the tournament as leading wicket taker with 13 – and Aaron Gillespie’s 2 for 37 completing a fine all-round competition for the Strabane player.
Disappointment for the Irish teenagers, as Nepal clinch the last qualification spot on offer for the finals in Bangladesh early next year.
U19 WORLD CUP QUALIFIER FINAL
At Kinrara Academy Oval,
IRELAND 184 all out (47.4 overs, G McClintock 45, A Austin 44, L Tucker 33, W McClintock 20, A Sheikh 3-21, DS Airee 2-20)
NEPAL 185/7 (46.2 overs, S Dhamala 47, R Rijal 35, DS Airee 26, R Anders 2-22, A Gillespie 2-37)
Nepal beat Ireland by 3 wickets