Crystal Palace have been relegated from the Europa League to the Europa Conference League following UEFA's enforcement of multi-club ownership regulations.
The FA Cup winners will now compete in European football's third tier whilst Nottingham Forest are set to inherit their Europa League place.
UEFA confirmed the south London club breached rules regarding multi-club ownership, delivering what has been described as a "devastating blow" to Palace.
The decision means Forest, who originally qualified for the Conference League after finishing seventh in the Premier League, will now participate in the more prestigious Europa League competition.
Crystal Palace qualified for Europe after winning the FA Cup this yearGettyPalace's demotion stems from ownership complications involving Eagle Football Holdings, the club's majority owners, who also control French side Lyon.
Eagle Football Holdings, owned by American businessman John Textor, holds controlling stakes in both Palace and Lyon. The French club also secured Europa League qualification by finishing sixth in Ligue 1.
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UEFA regulations prohibit two clubs under the same ownership from participating in the same European competition. In such circumstances, the club that achieved a higher domestic league position retains their place.
Lyon's sixth-place finish trumped Palace's twelfth-place Premier League position, resulting in the automatic demotion of the London club. Despite Palace winning the FA Cup to secure European qualification, UEFA's multi-club ownership rules take precedence over sporting achievement.
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Nottingham Forest will now inherit Crystal Palace's place in the Europa League
PAThe March 1 deadline for clubs to modify their ownership or executive structures to avoid such conflicts had already passed when the issue arose.
Palace officials are reportedly "furious" with UEFA's decision and plan to challenge it at the Court of Arbitration for Sport. The club intends to appeal the ruling, with CAS having the capability to expedite such cases given the time-sensitive nature of European competition preparations.
Club representatives travelled to UEFA headquarters in Switzerland to present their case before the decision was announced. They contended that Textor's 25 per cent voting rights at Selhurst Park meant he lacked sufficient influence to breach multi-club ownership regulations.
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Palace had hoped Lyon's relegation to Ligue 2 for financial violations might resolve the conflict. However, the French club successfully overturned their punishment earlier this week, ensuring the ownership clash remained unresolved.
The March 1 deadline that Palace missed represents a crucial cut-off date for clubs to restructure ownership arrangements to comply with UEFA regulations. CAS recently demonstrated the significance of this deadline by upholding UEFA's decision to exclude Drogheda United from the Conference League under similar multi-club ownership rules.
Crystal Palace will now play in the UEFA Conference League
PAThe Irish club had also failed to meet the March deadline for ownership modifications. CAS determined that the deadline was reasonable and had been properly communicated to all clubs.
This precedent suggests Palace face an uphill battle in their appeal. The timing of Lyon's successful appeal against their Ligue 2 relegation proved particularly damaging for Palace, as it eliminated what might have been their only route to retaining Europa League status.