Cape Town - Manchester City have avoided a transfer ban after being cleared of any wrongdoing over their signing of Benjamin Garre from Velez Sarsfield on Tuesday.
Premier League champions City could have been banned from signing players in the next two transfer windows had they been found guilty of breaching international transfer regulations when they signed Garre in 2016.
Velez alleged City acted unethically in approaching Garre when he was still 15, then broke transfer regulations by signing him when he turned 16.
The Argentine club had their initial complaint rejected, but took their case to the Lausanne-based Court of Arbitration for Sport (CAS).
After a significant delay, a ruling has now been delivered that backs City's claim that Garre's Italian passport entitled him to make the move and supports Fifa's original decision.
"The appeal filed on 12 December 2016 by Club Atletico Velez Sarsfield against the decision issued on 24 August 2016 by the single judge of the sub-committee of the Fifa players' status committee (the challenged decision) is dismissed and, accordingly, the challenged decision is confirmed," a CAS statement said.
Barcelona, Real Madrid and Atletico Madrid have all been subjected to transfer bans for breaching rules around the signing of international players under the age of 18 in recent years.
In May 2017, the Premier League fined City £300 000 and banned the club from signing academy players for two years after they were found to have approached the family of two young players who were registered with other clubs.
But City manager Pep Guardiola is now free to continue his transfer plans as he looks to strengthen his squad once the transfer window reopens at the end of the season.
City were crowned English champions on Sunday and Guardiola, hoping to challenge for the Champions League as well as defending the title next term, is reported to have been promised around £200 million to invest in new players.
Garre, 17, is yet to make his City debut and the forward has been playing for their under-23 team, scoring his first goal against Rotherham last August.