The Etihad outfit was taken to Federation Internationale de Football Association and CIS by Argentine club Velez Sarsfield but the world governing body had ruled that the signing of Benjamin Garre, then 16, by Manchester City was legal.
Federation Internationale de Football Association ruled in City's favour over the matter but Velez took their complaint to Lausanne-based CAS, where the case was heard last summer.
Of some encouragement to City is that Federation Internationale de Football Association ratified the transfer and upheld City's argument that their capture of Garre, who is now playing in their Under 23 side, was not a breach of the regulations because he holds an Italian passport.
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That case has been running since July, with a court case heard nine months ago. City successfully argued that Garre, because he has an Italian passport, was entitled to move.
Velez appealed to CAS in December 2016 after Federation Internationale de Football Association ruled in City's favour following a complaint about their move for Garre, the grandson of Oscar Garre - a member of Argentina's 1986 World Cup winning squad.
The Premier League champions faced a potential transfer ban if CAS found them guilty of flouting transfer rules over the signing of Garre from Velez Sarsfield in 2016. To complicate matters, Velez have also taken Federation Internationale de Football Association to CAS because the governing body rejected their original complaint in September 2016.
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After a significant delay, a ruling has now been delivered that backs City and supports FIFA's original decision.
Manchester City are sweating on a court ruling that could leave them with a transfer ban which stops Pep Guardiola building on his side's Premier League title success. Both Real Madrid and Barcelona have also served bans in recent years also.
Barcelona received a 14-month transfer ban in April 2014, with both Federation Internationale de Football Association and CAS rejecting their appeals.
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Both clubs are in the European Union or European Economic Area and the player is aged between 16 and 18.