The Court of Arbitration for Sport has halved Real Madrid's two-window transfer ban on appeal after the Spanish giants were sanctioned by FIFA for signing under-age players from abroad earlier this year.
The reigning European champions and their fierce rivals Atletico Madrid were originally punished for multiple breaches of global football's rules on the transfer of under-18s in January and both failed in appeals to FIFA in September.
But now sport's highest court has partially upheld an appeal from Real, which means the current leaders of LaLiga cannot sign any players in January but will be free to do so in the main summer transfer window. The club's £283,000 fine has also been reduced to £189,000.
Atletico have also appealed to CAS but no decision on their case has been announced yet.
Real's case was heard by a single arbitrator, Michele Bernasconi, in order to speed up the process and the hearing took place in Lausanne on December 14.
A CAS statement said: " In essence, the sole arbitrator found that some of the rule violations alleged by FIFA could be upheld, but not all of them.
"Considering that the infractions committed by Real Madrid were less serious and less numerous than argued by the FIFA judiciary bodies, the sole arbitrator ruled that the sanctions imposed on Real Madrid had to be reduced."
In an official announcement published on Real Madrid's website, the club said it had been informed by CAS that its sanction had been reduced to just the January 2017 transfer window.
"The decision highlights the injustice of the original ban imposed by FIFA, although the club regrets that CAS lacked the courage to revoke the ruling entirely," it added.
FIFA's investigation into the Madrid clubs, who met in May's Champions League final, uncovered several incidences of wrongdoing between 2007 and 2014 at Atletico, with Real's rules breaches coming between 2005 and 2014. Atletico were adjudged to have broken the rules more frequently, however, a fact reflected in their Â£708,000 fine.
In order to protect children from exploitation and trafficking, FIFA bans the transfer of under-18s to different countries unless strict criteria are met. These criteria include the players' parents moving to the country of the new club for non-footballing reasons.
In April 2014, Barcelona were given a two-window ban after they also breached the same rules on transferring minors across borders.