 Kakuta, 18, joined Chelsea from French side Lens in 2007 |
The Premier League club was found guilty of inducing French winger Gael Kakuta, 18, to breach his contract with Lens when he joined in 2007.
"Chelsea is banned from registering any new players for the two next registration periods," a statement on Fifa's website read.
Chelsea can appeal against the decision to the Court of Arbitration for Sport.
A spokesman for the London club told BBC Sport that they were looking into the matter and hoped to issue a statement shortly.
Lens lodged a complaint with world football's governing body after Chelsea had signed the winger two years ago.
Now Fifa's dispute resolution chamber (DRC) has ruled that Kakuta breached his contract with Lens and that Chelsea induced him to do so.
Fifa's statement continued: "The French club had lodged a claim with Fifa seeking compensation for breach of contract from the player and requesting also sporting sanctions to be imposed on the player and the English club for breach of contract and inducement to breach of contract.
"The DRC found that the player had indeed breached a contract signed with the French club. Equally, the DRC deemed it to be established that the English club induced the player to such breach."
The DRC ruled that Kakuta must pay compensation of 780,000 euros (£682,000), for which Chelsea are "jointly and severally liable".
Chelsea must pay additional "training compensation" of 130,000 euros to Lens, while the player has been banned from playing in official matches for four months.
Kakuta ended 2007/8, his first season with Chelsea, as the youth team's top scorer and was voted the academy's player of the year.
His second season was brought to an abrupt end in February when he suffered a double fracture of his ankle.