(Reuters) - Top European clubs will be limited to spending no more than 70% of their revenue on their squads under new "sustainability regulations" passed by UEFA's executive committee on Thursday.
The new approach will replace the previous Financial Fair Play system and introduces a "squad cost rule" that will limit spending on wages, transfers and agent fees.
The 70% figure will be reached after a three year transition period, gradually falling from 90%.
"UEFA's first financial regulations, introduced in 2010, served its primary purpose," UEFA president Aleksander Ceferin said at the Executive Committee meeting in Nyon.
"They helped pull European football finances back from the brink and revolutionised how European football clubs are run.
"However, the evolution of the football industry, alongside the inevitable financial effects of the pandemic, has shown the need for wholesale reform and new financial sustainability regulations."
UEFA added that acceptable losses will double from 30 million euros ($32.74 million) over three years to 60 million euros over the same period.
The new regulations will come into force in June 2022.
The issue of Russia's membership of UEFA was not on the agenda of the UEFA meeting but Ceferin suggested that it remained under consideration following the invasion of Ukraine.
"There are considerations about many things these days. Day by day, hour by hour, the situation is changing and again I would not be a serious UEFA president if I would first speak to the media and then speak to the Exco or general assembly or whoever," said the Slovenian.
Russia has expressed interest in a bid to host the European Championship in 2028 or 2032 but Ceferin declined to discuss that prospect.
“I won’t comment on any bids, UK bid or any other bids, but we are discussing about it and you will have the answer very soon," he said.
The United Kingdom nations and Ireland have made a declaration of interest to host the 2028 competition along with Turkey and Russia.
Italy, along with Turkey and Russia, have said they intend to bid for 2032.
Ceferin said discussions over the qualification format for the new look Champions League, which will begin in 2024/25 remained ongoing but a final decision was due next month.
UEFA were strong opponents of the FIFA plan for a biennial World Cup and Ceferin said he was pleased that the idea had been taken off the table by global soccer's governing body at their congress in Doha last week.
Asked about possible alternative tournaments, Ceferin said: "It is good that they have listened to the football community (about the biennial World Cup). I don't think there is much time for new competitions but let's speak about it and see. For now we didn't discuss it. For me it is very good that this project which is more or less a nonsense is off the table."