The Melbourne-based club, which also fields a team in the A-League Women's competition, has been battling financial problems for months while hamstrung by a FIFA ban on signing new players during transfer windows.

Football Australia said its independent licensing board had determined the club had failed to meet criteria for a licence, without going into specifics.

"As such, Western United FC's licence has been withdrawn, effective immediately," an FA spokesperson said on Friday.

"This outcome, while regrettable, reflects Football Australia's ongoing commitment to upholding the integrity, stability, and fairness of competitions for all clubs, players, and stakeholders."

Western United, which announced a takeover offer from a US-based property investor in May, said it would appeal the decision.

"The club will be exercising its right to appeal the decision with faith of a positive outcome as the sale of the club and injection of capital from KAM Melbourne continues to progress," a club statement read.

Western United joined the A-League in 2019 and was immmediately competitive, making the play-offs in its first season and winning the championship in its third.

The John Aloisi-coached club made the semi-finals in the last 2024-2025 season amid reports of mounting debts.

Aloisi, a former Australia forward, told Nine Network-owned newspapers he was "devastated for everyone involved at the club."