The European Union's top court said Friday that some FIFA rules on player transfers can conflict with European Union legislation relating to competition and freedom of movement.
The court's ruling came after former France international Lassana Diarra legally challenged FIFA rules following a dispute with a club dating back to a decade ago.
Diarra had signed a four-year contract with Lokomotiv Moscow in 2013. The deal was terminated a year later after Diarra was unhappy with alleged pay cuts. Lokomotiv Moscow applied to the FIFA dispute resolution chamber for compensation and the player submitted a counterclaim seeking compensation for unpaid wages.
The Court of Arbitration for Sport found the Russian club terminated the contract with Diarra "with just cause" and the player was ordered to pay €10.5 million ($11.2m).
Diarra claimed his search for a new club was hampered by FIFA rules stipulating that any new side would be jointly responsible with him for paying compensation to Lokomotiv.
"The rules in question are such as to impede the free movement of professional footballers wishing to develop their activity by going to work for a new club," the court said in a statement.
"Those rules impose considerable legal risks, unforeseeable and potentially very high financial risks as well as major sporting risks on those players and clubs wishing to employ them which, taken together, are such as to impede international transfers of those players."
The former Real Madrid player also argued that a potential deal with Belgian club Charleroi fell through because of the FIFA rules, and sued FIFA and the Belgian federation at a Belgian court for damages and loss of earnings of €6m ($7m).
With the lawsuit still going through Belgian courts, the case was referred to the European Court of Justice for a ruling.
The Diarra case, which is supported by the global players' union FIFPro, went through FIFA judicial bodies before the 2016 election of FIFA president Gianni Infantino, who has made it a priority to modernise transfer market rules.
The Court of Justice of the European Union (ECJ) ruling could also lead other players affected by the FIFA regulations like Diarra was to also seek damages.
"All professional players have been affected by these illegal rules [in force since 2001] and can therefore now seek compensation for their losses," Diarra's lawyers Jean-Louis Dupont and Martin Hissel said in a statement.
"We are convinced that this 'price to pay' for violating EU law will -- at last -- force FIFA to submit to the EU rule of law and speed up the modernisation of governance."
Dupont added that the whole transfer system will change with the court's ruling.
"FIFA's immunity is over, there will be a before and after in [football] governance after the EU [court] ruling," Dupont said.
FIFA said it was "satisfied that the legality of key principles of the transfer system have been re-confirmed in today's ruling. The ruling only puts in question two paragraphs of two articles of the FIFA Regulations on the Status and Transfer of Players, which the national court is now invited to consider.
"FIFA will analyse the decision in coordination with other stakeholders before commenting further," FIFA said.
"On behalf of professional football players worldwide FIFPRO welcomes these [ECJ] findings," the international players' union said.
"The ECJ has just handed down a major ruling on the regulation of the labour market... which will change the landscape of professional football."
Martin Terrier, the director of FIFPro Europe, said they were happy for Diarra but that he was not the only victim.
"The reality is we are going to see how to repair the damage for all the players who were victims of the [FIFA transfer] system," Terrier said.
Information from Reuters was used in this report.