The Premier League champions have instead been fined 370,000 Swiss francs (€340,000) by Federation Internationale de Football Association after breaching article 19, among others, of the world governing body's regulations on the status and transfer of players.
The club have been forced to pay 370,000 Swiss Francs, which works out at around £315,000.
The FIFA Discplinary Committee brought forward its decision on Tuesday, sanctioning City for breaches related to global transfers and registration of players under 18.
An investigation revealed the reigning Premier League champions did indeed violate Article 19 of FIFA's Regulations on the Status and Transfer of Players, which states that "international transfers of players are only permitted if the player is over 18".
"The club acted in accordance with the relevant regulations and has already notified Federation Internationale de Football Association of its intention to appeal against the Disciplinary Committee's decision and sanction", they said. City confirmed that the breaches particularly related to players' trial periods and participation in friendly matches.
Chelsea are now serving a transfer ban for breaching article 19 of the Regulations on the Status and Transfer of Players in the case of 29 minors, and the club was unable to sign players this summer as part of a one-year punishment. Players between the ages of 16 and 18 are also permitted to switch clubs if the transfer takes place within the European Union or the European Economic Area.
In a statement on the club's website in May, Al Mubarak said: "I believe, quite comfortably, if the process is going to be judged on facts then unquestionably we will prevail".
A City statement claims the breaches were made before the current regulations applied, "The Club accepts responsibility for the breaches which arose as a result of misinterpretation of the regulations in question".
They have appealed the sentence for their FFP indiscretions to the Court of Arbitration for Sport, despite the sentence not yet being handed down by UEFA.
The club insisted that it has since been fully compliant.