World football governing body FIFA on Wednesday rejected Chelsea FC’s appeal against a one-year transfer ban for breaking youth transfer rules.
FIFA said its appeals committee had upheld the ban imposed in February, but added that the English side will be allowed to register players under the age of 16.
Chelsea is expected to challenge the decision at the Court of Arbitration for Sport.
The ban does not however stop Chelsea from selling players.
This leaves room for stars such as Eden Hazard – wanted by Real Madrid – to leave Stamford Bridge.
The ban means that Chelsea cannot select any new signings until the 2020-21 season.
With just one more game left to play this season, Chelsea have confirmed Champions League qualification.
The Blues currently sit third with 71 points, 24 behind league leaders Manchester City.
The London side is also expecting to qualify for the Europa League final, which fellow English side Arsenal is also still competing in.
Chelsea will host Eintracht Frankfurt at Stamford Bridge while Arsenal will play away to Valencia.