Soccer's world governing body FIFA announced in April it had banned Barca from the transfer market for two consecutive windows and fined them 450,000 Swiss francs ($455,000).
Barca denied wrongdoing and the ban was suspended pending an initial appeal to FIFA, meaning the Catalan club were able to buy and sell players in the close season.
FIFA rejected the appeal and the club decided to challenge the decision at CAS, which heard evidence from Barca officials and youth players at a hearing on Dec. 5.
The CAS decision means Barcelona will not be able to sign any new players until January 2016, although the club said it could appeal the CAS decision to a Swiss federal court.
"FC Barcelona considers the sanction as being absolutely disproportionate as it implies an excessive punishment for the club given its track record," the club said in a statement.
Barca president Josep Bartomeu has fiercely defended their "La Masia" academy, which has produced the likes of Lionel Messi, Xavi and Andres Iniesta, saying the club have been the victims of a "grave injustice".
"With this sanction, FIFA is punishing a model that has existed for 35 years and which is the essence of this club," he told reporters in April.
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