Roman Abramovich has been disqualified as a Chelsea director by the Premier League board after the British government sanctioned the Russian billionaire.
Chelsea owner Abramovich was one of seven more oligarchs sanctioned this week by the UK following Russia's invasion of Ukraine.
The European champions have been placed under tough restrictions due to the sanctions on Abramovich.
Chelsea are unable to sign players, renew contracts or sell tickets to matches, with limits on the amount of money they are allowed to spend on travel to away games.
Now Premier League chiefs have taken action against Abramovich, who is described by the government as part of Russian President Vladimir Putin's inner circle despite his denials of any association.
"Following the imposition of sanctions by the UK Government, the Premier League board has disqualified Roman Abramovich as a director of Chelsea Football Club," a Premier League statement said on Saturday.
"The board's decision does not impact on the club's ability to train and play its fixtures, as set out under the terms of a license issued by the Government, which expires on May 31, 2022."
Abramovich had already announced his intention to sell Chelsea, with a host of potential buyers declaring their interest in a club that have won 19 major trophies since he bought the side in 2003.
The government is still open to a sale but would have to approve a new license, on the proviso no profit would go to the Russian, who has bankrolled the club to the tune of around £1.5 billion ($2 billion).
Chelsea are already feeling the impact of the sanctions, with shirt sponsor Three suspending its £40 million deal.
The club's official training wear partner Trivago said Friday that it was sticking with Chelsea despite the "challenging" situation.
Chelsea reportedly saw several credit cards temporarily frozen on Friday while they negotiate the terms of their special operating license with the government.
Thomas Tuchel's side host Newcastle on Sunday as they look to cement their hold on third place in the Premier League.
The Premier League's decision to disqualify Abramovich is unlikely to have any major impact given the sale process was already under way.
The Raine Group, instructed by Abramovich to handle the sale, is believed to have completed checks, allowing potential buyers to press on with their negotiations.
British property tycoon Nick Candy has confirmed his strong interest in buying the Blues and is in the process of building a consortium.
LA Dodgers co-owner Todd Boehly and Swiss tycoon Hansjorg Wyss are said to have made a joint bid.
There was some positive news for the club on Saturday, with the operating license reportedly amended to allow up to £900,000 to be spent per home match.