Chelsea was banned by FIFA on Friday from signing players until the 2020 offseason transfer window for breaching rules covering youngsters.
The Premier League club has the right to appeal against the sanction, which covers the next two transfer windows — the entire 2019-20 season — and also includes a fine of 600,000 Swiss francs ($600,000).
Fans display a large Chelsea flag as Chelsea's Antonio Rudiger, left, hugs Chelsea's Oliver Giroud who scored his side's first goal during the round of 32, second leg, Europa League soccer match between Chelsea and Malmo FF at Stamford Bridge stadium in London, Thursday Feb. 21, 2019. (Photo: AP)
The English Football Association was also fined 510,000 Swiss francs ($510,000) and given six months to "address the situation concerning the international transfer and first registration of minors in football," FIFA said.
Both the FA and Chelsea announced plans to lodge appeals.
The punishment is the latest blow for Chelsea, which has dropped to sixth in the Premier League and was knocked out of the FA Cup by Manchester United on Monday. Russian billionaire owner Roman Abramovich, who has transformed the London club with his wealth since his 2003 takeover, is currently unable to travel to Britain because of visa issues.
FIFA punished Chelsea for breaching rules related to the signing of 29 players under the age of 18.
International transfers involving players under 18 are prohibited unless their families had already moved to the new country for non-soccer reasons. There is an exception for clubs within the European Union and European Economic Community which allows the transfer of 16- to 18-year-old players provided conditions are met on education and living conditions.
It was first reported three years ago that Burkina Faso attacker Bertrand Traore played for Chelsea's under-18 team in 2011 while still 16. Traore now plays for Lyon.
FIFA did not detail the specifics of the case against Chelsea, but it said the club also entered into agreements which "allowed it to influence other clubs in transfer-related matters."
Chelsea said it was initially charged over 92 players but no breach was found by FIFA in relation to 63 of them.
"The club is extremely disappointed that FIFA has not accepted the club's submissions in relation to the remaining 29 players," Chelsea said in a statement. "Chelsea FC acted in accordance with the relevant regulations and will shortly be submitting its appeal to FIFA."
The FA is challenging its fine and said it had already "raised some concerns with FIFA regarding its disciplinary processes."
"We will however continue to work with FIFA and Chelsea in a constructive manner to address the issues which are raised by this case," the FA said in a statement.
Both the FA and Chelsea could ultimately challenge any FIFA appeal ruling at the Court of Arbitration for Sport. When Real Madrid received a similar ban in 2016, the sanction was reduced to one transfer window by CAS. But Atletico Madrid failed to cut its punishment covering two transfer windows.
Chelsea already finalized one transfer knowing the FIFA verdict was pending. Christian Pulisic was signed for 64 million euros ($73 million) in January and the 20-year-old winger was immediately loaned back to Borussia Dortmund for the rest of this season. The German club didn't have to pay a fee.
The transfer ban does not prevent Chelsea from selling players. Winger Eden Hazard, who has been linked with a move to Real Madrid, has indicated he could look for a transfer at the end of season but he is under contract at Stamford Bridge until the end of the 2019-20 season.