At a hearing On Tuesday, Lyon were unable to convince the regulator (DNCG) to lift the restrictions it had put on the club in November.

"Over the past few months, we have worked closely with the DNCG, meeting all of its demands with equity investments exceeding the amounts requested," the club said in a statement."

After the meeting, Lyon's president John Textor said he remained confident of avoiding the drop to Ligue 2 for next season, where the club has not played since 1989.

"Our liquidity situation has improved considerably," he said.

American Textor took over as Lyon's majority owner in December 2022 from long-standing boss Jean-Michel Aulas, who had overseen unprecedented success at the French outfit.

Textor, 59, also holds stakes in Brazilian side Botafoga, Belgian club Molenbeek. Earlier this week he sold his 43 percent stake in Premier League outfit Crystal Palace.

According to the BBC, they were sold for 190 million pounds to Woody Johnson, the owner of the NFL's New York Jets.

Lyon have reduced their salary bill with attacker Alexandre Lacazette and goalkeeper Anthony Lopes released.

They have sold Rayan Cherki to Manchester City and Maxence Caqueret to Como.

Textor said his Eagle group has also put 83 million euros into the club.

"Thanks to the equity contributions from our shareholders and the sale of Crystal Palace, our cash position has improved considerably, and we have more than sufficient resources for the 2025-2026 season," said the club statement.

- 'Sadness' -

Lyon qualified for next season's Europa League after finishing sixth in the French top-flight.

If their relegation is confirmed, they would be replaced in Ligue 1 by Reims.

Lyon won seven consecutive French titles between 2002 and 2008, under Aulas.

"It's a terrible blow to all those who love Lyon" Aulas said on X on Tuesday.

"For 36 years I made sure that such a situation could not happen.

"I gave everything to build a solid, respected, ambitious club that was financially healthy.

"Today, it's sadness that dominates. And an immense failure to understand," the 76-year-old added.

Only five clubs have won Ligue 1 more often. Paris Saint-Germain hold the record with 13 titles.

Lyon are set to begin their pre-season on July 7.