FIFA have rejected Chelsea's appeal against a two-window transfer ban, Sky Sports reports.
The world football governing body has upheld the ban they handed Chelsea in February, after an investigation into the club's signing of foreign U-18 players.
The rules state that no player under 18 is allowed to move to a club in a different country, unless their parents are moving there for non-footballing reasons, or unless they are aged 16-18 and moving within the EU.
As it stands, Chelsea can still buy players, but would not be able to register them until the summer of 2020.
Christian Pulisic will not be affected, as he was registered by the Blues in January and loaned back to Borussia Dortmund.
But permanent moves for loan signings Mateo Kovacic and Gonzalo Higuain, are not possible at this stage.
The club have the option to go to the Court of Arbitration for Sport (CAS), to see if the ruling can be overturned or frozen.
The transfer window re-opens at midnight Thursday, May 16.