UEFA has confirmed it has lifted the restrictions on transfer spending and Champions League squad sizes on Manchester City and Paris Saint-Germain.

Both City and PSG competed in last season's Champions League with just 21 players instead of the usual 25 and also had their spending capped at £49million for breaches of Financial Fair Play (FFP) regulations.

In addition, the clubs agreed that their wage bill for the 2014-15 Champions League squad would not exceed that of the 2013-14 campaign, while fines of £16.3m a year were levied on both.

UEFA relaxed its regulations in July pending a final decision based on the clubs' compliance with FFP regulations - something both have successfully done.

"The UEFA Club Financial Control Body Investigatory Chamber (CFCB IC) has today confirmed, after reviewing the full circumstances of the case, the lifting of a number of restrictions imposed on Manchester City and Paris Saint-Germain," a statement read.

"In particular, both clubs have been released, as from this season, from the restriction on registering new players in UEFA competitions, from the limit on the number of players on their A list, and from the restriction on the total amount of employee benefit expenses.

"Both clubs demonstrated to the satisfaction of the CFCB IC that they had met all financial targets regarding employee benefit expenses and break-even compliance, as required under their settlement agreements for the financial years ending 2014 and 2015. In the case of Paris Saint-Germain, compliance with the targets was reached one year earlier than originally foreseen.

"Release of the sporting restrictions was made provisional at the beginning of July, subject to additional controls and the submission of audited financial accounts by both clubs. After further review of the relevant documentation, the CFCB IC confirmed that all relevant targets had been met. When assessing the information submitted, particular attention was paid to the correct determination of the reporting perimeter and to the value of sponsorship contracts.

"Both clubs are still subject to the settlement regime and will remain under strict monitoring throughout the whole 2015-16 season. Exit from the settlement regime is subject to the fulfilment of additional break-even targets for the financial year ending 2016."