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).
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.”