AC Milan's application for a voluntary agreement to restructure their finances has been rejected by UEFA's independent Club Financial Control Body.
The club had hoped to present a refinancing programme that would bring an end to "ongoing monitoring" by the governing body of European football over Financial Fair Play (FFP) regulations.
Eighteen-time Serie A champions Milan were bought by Chinese investors Rossoneri Sport Investment Lux in April and spent over €230m (£210m) on new players in the summer.
That outlay - and concern over Milan's ability to repay several loans to an American hedge fund - means the club are being monitored by UEFA's Fair Play and Social Responsibility Committee.
Hedge fund Elliott Management is reported to have loaned Milan's Chinese owners - headed by businessman Li Yonghong - €180m (£157m) and a further €123m (£107m) to the club.
Together with approximately €50m (£43.6m) of interest, the loans must be repaid by October 2018, according to reports.
Should an investigation be launched and subsequent penalties be applied, Milan could face exclusion from continental competitions, if they qualify in the future.
A UEFA statement read: "The Investigatory Chamber of the independent UEFA Club Financial Control Body has reviewed the application for a voluntary agreement made by AC Milan as part of the FFP regulations.
"After careful examination of all the documentation and explanations provided, the Chamber decided not to conclude a voluntary agreement with Milan.
"In particular, the Chamber considered that, as of today, there are still uncertainties in relation to the refinancing of the loans to be paid back in October 2018 and the financial guarantees provided by the main shareholder.
"Milan will continue to be subject to the ongoing monitoring process and the situation will be assessed again in the first months of 2018."
The club signed Leonardo Bonucci, Andre Silva, Franck Kessie and Hakan Calhanoglu during the summer as they looked to challenge for the Serie A title.
Milan are currently competing in the Europa League and have qualified for the last 32, and it is hoped they secure a Champions League place in the 2018-19 season.
Should Milan fail to qualify for the continent's top tournament it is reported they will end the current campaign with €100m (£87m) of debt, and be forced to sell high-profile players to satisfy FFP regulations.
Those in danger of being moved on, according to the Italian media, would include talented goalkeeper Gianluigi Donnarumma and club captain Bonucci, the Italy defender.
Last week Milan director Marco Fassone told La Gazzetta dello Sport: "The funeral has come a bit early. The UEFA committee has made requests which would be objectively impossible to satisfy, not only by Milan but by any club. I am confident we can organise our refinancing by the spring."