Chelsea and the Football Association have been sanctioned by Fifa's disciplinary committee for breaching regulations over the transfer of minors, the world governing body has announced.
The Blues have been banned from registering players for two consecutive transfer windows for 29 incidences of breaching article 19, which relates to the transfer of players aged under 18.
The London club were also fined 600,000 Swiss francs (over £460,000), while the FA has been fined 510,000 Swiss francs (over £390,000) for breaching the rules in connection with minors.
The Premier League club announced on Friday morning that they intend to appeal the ban, saying they "categorically refute" Fifa's findings.
Chelsea also twice breached regulations relating to third-party influence, article 18bis, Fifa said.
Fifa said in a statement: "The Fifa disciplinary committee has sanctioned the English club Chelsea FC and The Football Association for breaches relating to the international transfer and registration of players under the age of 18.
"Chelsea was found to have breached art. 19 of the Regulations in the case of twenty-nine (29) minor players and to have committed several other infringements relating to registration requirements for players.
"The club also breached art. 18bis of the Regulations in connection with two agreements it concluded concerning minors and which allowed it to influence other clubs in transfer-related matters.
"The disciplinary committee sanctioned Chelsea with a ban on registering new players at both national and international level for the next two (2) complete and consecutive registration periods.
"This ban applies to the club as a whole - with the exception of the women's and futsal teams - and does not prevent the release of players."
The punishment will be a blow to manager Maurizio Sarri who is already under pressure following a below-par performance in the Premier League, so the news that hew can not bolster his squad will be significant.
Star player Eden Hazard has been linked with a move to Real Madrid over the summer, so the inability to sign a replacement could force the club to make the Belgian stay at Stamford Bridge.
Chelsea's signings in the most recent window were striker Gonzalo Higuain on an 18-month loan and American Christian Pulisic, who remains on loan at Borussia Dortmund until the end of the season.