London - Blackburn Rovers, Leeds United and Nottingham Forest will not be allowed to sign new players in the January transfer window after breaching financial regulations, the Football League announced on Monday.
The three clubs all incurred financial losses of over 8 million ($12.5 million, 10.1 million euros) last season, which left them in breach of the financial fair play (FFP) rules to which the 24 Championship teams must adhere.
The Football League will now scrutinise the accounts of Queens Park Rangers, Leicester City and Burnley, all of whom were promoted from the Championship to the Premier League last season.
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"An initial analysis of FFP submissions from the current 24 Championship clubs has indicated that three clubs, Blackburn Rovers, Leeds United and Nottingham Forest, have failed to meet the fair play requirement under the division's FFP rules," the Football League said in a statement.
"Consequently, all three will be subject to an 'FFP embargo' under Football League regulations from January 1, 2015 for the remainder of the current campaign."
Under the embargo, the three teams will be barred from signing any new players, including loan deals, unless they have 24 or fewer "established players" in their squads.
Established players are described as players aged 21 or over who have made at least five starts for a club.
The embargoes will be lifted at the end of the season if the clubs can demonstrate that they have kept their losses below 6 million.
Blackburn, relegated from the Premier League in 2012, are currently eighth in the Championship, one place above two-time European champions Forest, who last played in the top flight in 1999.
Leeds are 19th, five points above the relegation zone, having endured financial turmoil since their relegation from the Premier League in 2004.