Real Madrid and Atletico Madrid have been banned from registering new players in the next two transfer windows, FIFA announced on Thursday.
FIFA's disciplinary committee said the two clubs "violated several provisions concerning the international transfer and first registration" of players under 18 years of age.
Real and Atletico were each issued a transfer ban to last across two windows for breaking FIFA rules. Atletico were hit with a €823,000 ($893,000) fine, while Real Madrid were fined €329,000 ($360,000).
Included in FIFA's list of players in question were the four sons of Real Madrid coach Zinedine Zidane, a fact that Real general director Jose Angel Sanchez said points to the "absurdity" of the ban.
Pending appeals, neither club will be allowed to register new players until the summer of 2017, as they will be locked out of the next two transfer windows this summer and winter. However, both clubs may register new players during the current transfer window until it closes on Feb. 1.
When the ban is in place, both clubs will still be able to buy players, as Barcelona did with Arda Turan and Aleix Vidal last summer while still under their transfer ban. However, such players would not be eligible to play for the club until after the ban has been lifted. Turan and Vidal were unable to make their debuts for Barcelona until this month.
Both clubs said on Thursday that they would appeal. Atletico Madrid president Enrique Cerezo called the ban a "huge injustice."
"We do not agree with the sanctioning ruling from the international football body and are studying the documentation received to lodge an appeal," Atletico said in a club statement.
Real Madrid released a longer statement explaining why FIFA's ban was not justifiable. They said they never used foreign underage players without registering them with the Spanish federation, as claimed by FIFA, nor signed them without complying with the required procedures.
The club added that they have always informed the local federation about all the players on their youth academy, another alleged breach of regulations by the club, according to FIFA.
Last year, Real called reports of a possible ban "false" and said they had "always scrupulously adhered to the FIFA regulations."
They also mentioned their "absolute commitment to the defence, protection and the correct and healthy development of minors."
Neither club were currently negotiating any new signings, but the ban could force them to scramble to bring in new players this month.
Both clubs may negotiate deals to bring back players that were on loan to other clubs. The teams can also sell players.
La Liga also issued a statement calling the bans "out of proportion for both clubs."
"After learning of the sanctions to FC Barcelona, Real Madrid CF and Club Atletico de Madrid, La Liga considers that the aforementioned law does not really protect the child," the statement said.
The clubs were found to have breached Article 19 of FIFA's Regulations on the Status and Transfer of Players, which covers protection of minors, as well as Article 5 on registration of players and Article 9 on the requirement for an international transfer certificate for each signing.
FIFA's statement added: "Both clubs are to serve a transfer ban that prevents them from registering any players at national and international level for the next two complete and consecutive registration periods for breaching articles 5, 9, 19 and 19bis as well as annexes 2 and 3 of the Regulations on the Status and Transfer of Players (the 'Regulations').
"The transfer ban, which does not affect the current registration period at all, given that it opened before the decisions were notified, applies to each club as a whole -- with the exception of the women's, futsal and beach soccer teams -- and does not prevent the release of players."
- FIFA Media (@fifamedia) January 14, 2016
There had been speculation for some time that the two Madrid clubs would be punished, with suspended FIFA president Sepp Blatter telling El Mundo Deportivo last month: "If Barca faced sanctions for breaking FIFA rules and the two Madrid clubs committed identical infractions, then it's normal practise that they would face similar sanctions."
In May of last year, Real Madrid had strongly denied a report in AS that they had brought 25 Chinese youngsters under age 14 to live and develop as footballers in Spain.
In January 2015, AS published a report on La Liga clubs' reliance on foreign youngsters that said Atletico had the most non-Spanish players in its youth academy, with 43 players from 26 countries. It said 21 of them were under 16 at the time.
Barcelona president Josep Maria Bartomeu, whose club failed with an appeal at the Court of Arbitration for Sport, has repeatedly criticised FIFA's rules over youth transfers and said a year ago that he did not wish to see arch-rivals Real punished as a result.
FIFA has defended its regulations and said in the statement: "FIFA works hard to protect the rights of players under the age of 18 -- whether male or female, amateur or professional.
"This is done through the enforcement of regulations prohibiting the international transfer of minors, or the first registration of minors in a country other than their own, except in specific circumstances (cf. art. 19 of the Regulations) that must be approved by the sub-committee appointed by the Players' Status Committee.
"As such, the provisions relating to the protection of minors need to be strictly applied. This has been confirmed on various occasions by the Court of Arbitration for Sport. Opening up the door to exceptions beyond those carefully drafted and included in the Regulations would unavoidably lead to cases of circumvention of the rationale for these provisions."
Information from The Associated Press was used in this report.