Manchester City’s two-year ban from the Champions League has been lifted.
European football’s governing body UEFA issued the ban in February for alleged “serious” breaches of club licensing and financial fair play regulations.
City immediately signalled their intention to appeal at the time, and the Court of Arbitration for Sport has now cleared them to compete in the Champions League next season.
However the club will still have to pay a €10m (£8.9m) fine – down from an initial €30m (£26.9m) penalty.
In a statement, City said they had not yet reviewed the full ruling but they welcomed “the implications” of the court’s decision.
Sky’s north of England correspondent Tom Parmenter said the ruling is a “significant win” for the club.
Pep Guardiola’s team will now compete in the Champions League next season after securing second place in the Premier League with Saturday’s 5-0 win over Brighton.
UEFA opened an investigation into City in 2019 following allegations the club’s Abu Dhabi owners overstated sponsorship revenues to comply with the financial fair play requirements.
City have repeatedly denied any wrongdoing and dismissed the probe as “flawed” and “prejudicial”.
The club later appealed to the Court of Arbitration for Sport in the hope of still being able to take part in the competition.
The court found that City had not disguised equity funding as sponsorship, but said they had failed to co-operate with investigators.
Reacting to Monday’s ruling, UEFA said it “remains committed” to the principles of financial fair play, which means that clubs only spend what they earn.
It said the court found there was “insufficient conclusive evidence” to uphold its decision from February and many of the alleged breaches were “time-barred due to the five-year time period foreseen in the UEFA regulations”.
City remain under investigation by the Premier League, which is looking into the same allegations as well as claims over the club’s recruitment of academy players and third-party ownership.