The sanction announced Wednesday, which covers the summer and January transfer periods, followed an investigation over the past year into Barcelona's signing of players under 18 from 2009-13.
FIFA found the signing of 10 unidentified players to be in breach of its rules covering the protection of minors. A fine of 450,000 Swiss francs ($509,000) was imposed on Barcelona, which was given 90 days "to regularize the situation of all minor players concerned."
Barcelona released a 14-point rebuttal, vowing to appeal the decision to the Court of Arbitration for Sport if it did not succeed in reversing the decision with soccer's governing body.
"Ever since FIFA opened the case, the players' licenses were canceled and they have not participated in any official games," Barcelona said in a statement that defended La Masia as "an example" of social responsibility in educating young players on and off the field.
"These players have all been given the option to remain with the club despite their licenses being revoked," the statement added.
The Spanish Football Federation was found by FIFA to have violated the rules covering the registration of minors and fined 500,000 Swiss francs ($565,500).
Barcelona said in February 2013 that FIFA had sent a communication instructing it not to select six under-18 players for youth matches: South Korea's Lee Seung Woo, Paik Seung-Ho and Jang Gyeolhee; France's Theo Chendr; Nigerian-Dutchman Bobby Adekanye; and Cameroon's Patrice Sousia.
The international transfer of players under the age of 18 can only be approved if their parents move to the country for non-soccer reasons. Players between 16 and 18 can move within Europe if certain standards of education and living conditions are met.
The punishment leaves in doubt Barcelona's recent agreements with Borussia Monchengladbach goalkeeper Marc-Andre Ter Stegen and Croatian teenager Alen Halilovic.
Barcelona had three working days to inform FIFA of an intention to appeal and an additional week to provide its reasons for challenging the punishment.
Chelsea of England's Premier League had a one-year transfer embargo imposed after being found by FIFA to have induced teenager Gael Kakuta to leave Lens, the penalty was overturned in 2010 by the Court of Arbitration for Sport.
FIFA tightened its rules on transferring minors in 2010, to help end what the global players' union FIFPro described as the equivalent of "child trafficking." FIFA sought to close loopholes which allowed clubs and agents to bring youngsters to Europe on the promise of getting a lucrative contract, only to abandon them without a job or education.
In the Barcelona case, FIFA stressed the "interest in protecting the appropriate and healthy development of a minor as a whole must prevail over purely sporting interests."
"The disciplinary committee emphasized that the protection of minors in the context of international transfers is an important social and legal issue that concerns all stakeholders in football," FIFA said in a statement. "Above all, the committee highlighted that while international transfers might, in specific cases, be favorable to a young player's sporting career, they are very likely to be contrary to the best interests of the player as a minor."
Barcelona potentially needs to sign a replacement for goalkeeper Victor Valdes, who said he intends to leave and is sidelined for seven months following a knee injury. Barcelona also needs a central defender to replace captain Carles Puyol, who also is leaving after this season.
The FIFA case threatens to further damage the image of a Catalan institution that is owned by its members and prides itself as being "more than a club". It is currently grappling with the fallout from last year's signing of the 22-year-old Neymar.
Barcelona president Sandro Rosell quit in January as he fights a lawsuit alleging he misappropriated funds by hiding the real cost of Neymar's signing from the Brazilian club Santos. In February, Barcelona paid 13.55 million euros (then $18.6 million) to Spanish tax authorities to cover any potential irregularities, while maintaining its innocence of fraud charges.
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