Nantes have been hit with a one-year transfer ban after the Swiss Federal Supreme Court found that the signing of forward Ismael Bangoura had breached regulations.
FIFA and the Court of Arbitration for Sport, both based in Switzerland, had originally ruled that Nantes had incited Bangoura, 29, to break his contract with Dubai club Al Nasr in January 2012.
The ruling means that Nantes, currently 15th in the French top flight, will be unable to make any signings during the next two transfer windows.
Nantes and Bangoura, who has already served a four-month ban as a result of the dispute, are also obliged to pay Al Nasr 4.5 million euros in compensation.
Nantes had argued that Al Nasr had stopped paying Bangoura and that they had de-registered the Guinean international before his move to France.
“Where is the moral?” Nantes president Waldemar Kita asked Ouest France. “The player wasn’t being paid and couldn’t train.”
Nantes sporting director Franck Kita said the club had already made contingency plans and that they would not lose any players apart from Serbian striker and top scorer Filip Djordjevic.
“We organised ourselves as a consequence [of the pending appeal],” he said. “We signed players and no one will be out of contract apart from Djordjevic. And everyone is non-transferable.”