Wahab has had one term in the upper house in the past and there was strong opposition to his nomination again.
A section of the IUML had supported party general secretary and former legislator K.P.A. Majeed.
"The decision of our supreme leader Panakad Syed Hyderali Shihab Thangal is final and it was he who had made the announcement. We have the convention of giving the supreme leader the complete authority to make the decision," said Former Union Minister E. Ahamed, a Lok Sabha member.
Polls to the Rajya Sabha from Kerala will be held later this month for three vacancies caused due to the retirement of three upper house members.
The Congress has already chosen its senior leader Vayalar Ravi as the party's nominee. The CPI-M has fielded youth leader K.K. Raghesh.