Rangers "newco" have been relegated to the Third Division of the Scottish Football League after the organisation's member clubs voted on the fate of the former SPL giants.
The 30 SFL clubs met at Hampden Park on Friday to determine the future of Charles Green's Sevco Scotland Limited, who were previously refused admission into the Scottish top flight.
The SPL and Scottish Football Association were hopeful Rangers would be parachuted into the First Division, with SFA chief executive Stewart Regan claiming that putting the Ibrox club into the Third Division would bring financial catastrophe and a "slow, lingering death" of the game.
The SFA and SPL had offered a reorganisation of the structure if Rangers were placed in Division One, but a majority of SFL sides intimated before the ballot that Rangers should start in the bottom tier of Scottish football and 25 of the 30 clubs voted in favour of such a measure.
SFL chief executive David Longmuir said: "The member clubs of the Scottish Football League have today voted to willingly accept The Rangers Football Club as an associate member of the Scottish Football League.
"Furthermore, the Scottish Football League's only acceptable position will be to place Rangers FC into the Third Division of the Irn-Bru Scottish Football League from the start of this season."
Longmuir also stated that he was 'comfortable' with the outcome of the vote and that the decision from the SFL clubs was taken with the sport's best interests at heart.
He said: "Today's decision has been one of the most difficult for all concerned but it has been taken in the best interest of sporting fairness which is the fundamental principle of the Scottish Football League.
"The Scottish Football League has been entirely consistent with our willingness to work with other bodies to ensure that we focus on rebuilding our game, restoring pride in our game and exploring revenue streams and our willingness to achieve these aims does not alter."
Raith Rovers chairman Turnbull Hutton revealed that Green, Regan and Rangers manager Ally McCoist addressed the meeting and told said: "It was a good meeting that was handled well and all the issues came out. There was also a good hearing for those who came into the meeting.
"The league made a decision and I think it was the right decision and the right process and I'm proud to be a member of the Scottish Football League.''
Dunfermline chairman John Yorkston said it would not be a shock to see the SFA and SPL formulating plans for an SPL2, something which has already been mooted.
"That wouldn't surprise me," he said. "The 10 First Division clubs sent out a message today saying that we are looking for a 42-club solution, the vote was 25 to five so I think that was fairly unanimous."
Yorkston was echoing Longmuir's comments which made up part of the statement read to the gathered media.
Longmuir said: "Something I would like to say very clearly today is that he First Division clubs in particular made it very clear to us that they are looking for an all 42-club (including the SPL) solution to Scottish football's restructuring issue - that was a very clear direction of the will of all SFL clubs."