The Court of Arbitration for Sport (CAS) on Tuesday backed a one year transfer ban against Barcelona in a major blow to the Spanish football giants.
The court said in a statement that it had "dismissed" an appeal made by Barcelona against the ban imposed by FIFA in April for breaching rules on signing players aged under 18.
Barcelona, who are second behind Real Madrid in La Liga, are banned from buying players during the transfer window that opens on January 1 and for the summer transfer period before the 2015-16 season.
That means they cannot sign a player until January 2016. Barcelona were also fined 450,000 Swiss francs (Dhs 1.6 million).
The Spanish federation was also reprimanded by FIFA.
"The panel found in particular that FC Barcelona had breached the rules regarding the protection of minors and the registration of minors attending football academies," said the statement.
"The FIFA decision is confirmed in full and the sanction remains in force."
The CAS panel promised to give the full reasons for its decision as quickly as possible.
FIFA announced the ban in April this year after an investigation into several players aged under 18 who were registered and played for Barcelona between 2009 and 2013.
It found that Barcelona and the Spanish federation were guilty of a "serious" infringement of rules for 10 players.
Barcelona made a first appeal to the FIFA disciplinary committee and the sanction was suspended enabling them to make major signings such as Luis Suarez from Liverpool for 95 million euros ($115 million).
The club spent more than 150 million euros in all before FIFA's appeal committee upheld the ban.
Barcelona then went to the CAS and asked for an emergency procedure so that a decision was announced before the January transfer window opens.
Barcelona are one point behind Real Madrid but have played one game more.
Atletico Madrid in third place are just three points behind.