Chelsea have been banned from registering new players until July 2020 for breaking FIFA regulations over the transfer of minors.
The Blues swiftly announced they were appealing against the two-window registration ban and 600,000 Swiss francs (over £460,000) fine imposed by FIFA's disciplinary committee over the recruitment of 29 players aged under 18.
The Football Association was fined 510,000 Swiss francs (over £390,000) for breaching the rules in connection with minors and also plans to contest the sanction.
FIFA on Friday announced Chelsea had been sanctioned for contravening article 19, which governs the international transfers of under-18s. The Blues were also penalised for twice breaching regulations relating to third-party influence, article 18bis, FIFA said.
FIFA regulations prohibit the international transfer of players under 18, unless in specific circumstances not related to football. Players aged 16 to 18 can move within the European Union.
"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," a FIFA statement said.
Chelsea were given 90 days "to regularise the situation of the minor players concerned", FIFA said.
The FA was given six months "to address the situation concerning the international transfer and first registration of minors in football".
The Press Association in January 2016 highlighted possible irregularities in the signing of Bertrand Traore by Chelsea.
Chelsea officially signed Traore in January 2014, the first transfer window after his 18th birthday, but it emerged he played for the club more than two years earlier, when he was 16.
FIFA on Friday would not confirm if Traore's transfer was one of the 29 for which Chelsea have been punished, but it was the trigger for the investigation.
Barcelona, Real Madrid and Atletico Madrid have all been sanctioned for similar offences.
Barcelona contested their two-window sanction, unsuccessfully, but their appeal delayed the penalty and allowed them to sign players.
Real Madrid's penalty was reduced following an appeal to one January window, which had little impact.
Chelsea said in a statement: "Chelsea FC categorically refutes the findings of the FIFA disciplinary committee and will therefore be appealing the decision.
"The club wishes to emphasise that it respects the important work undertaken by FIFA in relation to the protection of minors and has fully cooperated with FIFA throughout its investigation.
"Initially, Chelsea FC was charged under Articles 19.1 and 19.3 in relation to 92 players.
"We welcome the fact that FIFA has accepted that there was no breach in relation to 63 of these players, but the club is extremely disappointed that FIFA has not accepted the club's submissions in relation to the remaining 29 players.
"Chelsea FC acted in accordance with the relevant regulations and will shortly be submitting its appeal to FIFA."
