AC Milan's nightmare has officially become reality.

UEFA's adjudicatory arm barred the Rossoneri from European competition for one of the next two seasons, citing violations of the governing body's Financial Fair Play regulations.

Although the ban will be active for the next two years, Milan will only be ordered to sit out one of the 2018-19 or 2019-20 campaigns.

If it decides not to appeal the decision in the Court of Arbitration for Sport, the seven-time European Cup winner will likely be kicked out of this coming season's Europa League. It qualified for the competition as the sixth-placed finisher in Serie A.

"The club is excluded from participating in the next UEFA club competition for which it would otherwise qualify in the next two seasons (i.e. one competition in 2018/19 or 2019/20, subject to qualification," UEFA said in a statement.

The Investigatory Chamber of the UEFA Club Financial Control Body (CFCB) said Milan, which accrued more than €200 million in aggregate losses between 2014 and 2017, fell short of break-even compliance.

UEFA previously denied the club both a voluntary agreement and settlement agreement because of ongoing uncertainties relating to Li's finances. Li only completed the €740-million takeover last summer thanks to a €303-million high-interest loan from U.S. hedge fund Elliott Management.

Previously unknown in China, Li has struggled to repay Elliott on time. Elliott can assume control of Milan if Li fails to pay back the remainder by October 2018.

UEFA's ruling comes as Li continues to negotiate with potential buyers. U.S. media mogul Rocco Commisso and the family of Chicago Cubs owner Tom Ricketts are reportedly interested in acquiring a majority stake.

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