The club were found guilty of 29 incidences of breaching article 19, which relates to the transfer of players aged under 18.
FIFA released a statement on its website, saying that the FIFA Disciplinary Committee found that the London club and Football Association broke its rule over the worldwide transfer and registration of players under the age of 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 also breaching the rules in connection with minors.
This comes following a Federation Internationale de Football Association investigation into irregularities regarding Chelsea's transfer and registration of 29 foreign under-18 players, including Burkina Faso global Bertrand Traore who is now at Lyon.
It comes following a Federation Internationale de Football Association investigation into the Blues' signing of foreign under-18 players, including former striker Bertrand Traore. Chelsea FC categorically refutes the findings of the FIFA Disciplinary Committee and will therefore be appealing the decision.
The ban does not prevent the release of players and will not apply to Chelsea's women's and futsal teams.
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The Blues have also been handed a £640,000 fine and 90 days to "regularise the situation", while the FA have been ordered to pay £391,000 and told to address the situation within the next six months.
Chelsea were given a transfer ban in 2009 after there was a complaint about the youth player Gael Kakuta joining illegally two years earlier.
However, the club said numerous individual cases highlighted involved players on short-term trials who were not signed.
Chelsea have been hit with a two window transfer ban by Federation Internationale de Football Association.
In fact, the FA has a "period of six months to address the situation concerning the worldwide transfer and first registration of minors in football".