Here is a detailed look at the ban announced by FIFA on Thursday:
WHAT'S THE PUNISHMENT?
Real Madrid and Atletico Madrid can still sign players in the current transfer window, but then won't be able to register any new players until after the 2016-17 season.
The transfer ban does not affect the January window because it opened before the decisions were notified
FIFA also imposed fines of 900,000 Swiss francs ($900,000) for Atletico and 360,000 Swiss francs for Real Madrid. Both clubs were reprimanded and given 90 days to regularize the situation of all minor players.
WHAT THE CLUBS DID
FIFA said both teams violated "several provisions concerning the international transfer and registration of minor players."
FIFA regulations prohibit clubs from making international transfers involving underage players, except in a few specific cases that must be approved by the governing body. FIFA said both clubs broke such rules when bringing youngsters to their academies and adding them to their youth squads.
WHAT THEY CAN STILL DO
Real Madrid and Atletico can reach agreements to buy players from other clubs during the transfer ban, but cannot register them to play until the ban ends in 2017. They can negotiate deals to bring back players that are on loan to other clubs if there is no financial compensation involved, and they can also sell players if wanted.
WHAT'S NEXT?
Both teams said they will appeal FIFA's decision.
Atletico Madrid said it "does not agree with the sanctioning ruling from the international football body and is studying the documentation received to lodge an appeal."
In a long and detailed statement, Real Madrid called the ban "inappropriate", arguing that the club never broke any of the rules, as claimed by FIFA. It said it will appeal to sporting courts at all levels to try to reverse the decision.
RIVAL PROBLEM
FIFA punished Barcelona for the same reason two years ago, with the club serving its sanction in 2015 after stalling the transfer ban by a series of appeals that enabled it to sign players including Luis Suarez, Ivan Rakitic and Claudio Bravo in 2014.
The Catalan club signed players such as Arda Turan and Aleix Vidal after the ban took effect again, but couldn't register them until this month.
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