Real Madrid can buy new players in next summer's transfer window after sport's highest court on Tuesday halved their initial two-window ban imposed by FIFA.
The European champions had been sanctioned by world football's ruling body for irregularities in the signing of foreign under-18 players.
But after an appeal the Court of Arbitration for Sport (CAS) partially overturned the FIFA sentence, with Real still banned from recruiting in the upcoming January window.
CAS also cut the fine imposed by FIFA on the club from 360,000 Swiss francs ($350,000, 340,000 euros) to 240,000.
Real welcomed the verdict but rued that the Spanish giants weren't fully exonerated.
"This decision shows the injustice of the punishment imposed by FIFA whilst the club regrets that CAS didn't have the courage to overturn it completely," the club said.
Real's appeal was investigated by Swiss lawyer Michele Bernasconi who found "that some of the rule violations alleged by FIFA could be upheld, but not all of them," according to a CAS statement.
It concluded: "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."