French club Marseille and Senegal's Pape Gueye have been told they must pay Watford £2.3m for a contract breach that took place in 2020.
The Court of Arbitration for Sport (Cas) announced on Friday it had upheld sanctions previously imposed by Fifa, football's world governing body.
Gueye, 24, who has made 74 appearances for the Ligue 1 side, has been issued with a four-month ban from football.
But Cas overturned the one-year transfer ban imposed on Marseille.
The dispute began in 2020, when Gueye signed a pre-contract agreement with then-Premier League side Watford in April - with the club even announcing their new signing from Le Havre.