World football's governing body Fifa says a ban on Chelsea signing senior male players over the next two transfer windows will remain in place. The west London club had appealed against the ruling after it was found guilty of flouting rules over the recruitment of minors.
On Wednesday, Fifa's appeal committee allowed the club to bring in players under 16 who are not international transfers.
But from 11 June – when the summer transfer window opens – Chelsea will not be able to bolster a first team squad that could lose star striker Eden Hazard. The 28-year-old Belgian is the target of Real Madrid.
Chelsea's legal team said on Wednesday that it would challenge the Fifa's decision at the Court of Arbitration for Sport. "The club is very disappointed that the transfer ban of two consecutive registration periods was not overturned," said a club statement.
"Chelsea FC categorically refutes the findings of the Fifa appeal committee. It acted in accordance with the relevant regulations."
Maurizio Sarri's side qualified for next season's Uefa Champions League following a 3-0 victory over Watford on 5 May. That win sent them third, one point ahead of Tottenham Hotspur.
If the positions remain the same after the final game of the English top flight season on 12 May, Chelsea will progress into the draw for the group stages of next season's Champions League.
If they finish in fourth place, they will have to play in the qualifying tournament for the group stages.
On 9 May, Chelsea entertain Eintracht Frankfurt in the second leg of their Europa League semi-final. If Chelsea manage to reach the final in Baku on 29 May and claim the trophy, they will also advance to the Champions League group stages.