LaLiga has rejected Barcelona's request to register Gavi as a first-team player with a new, improved contract, sources have told ESPN.
The 18-year-old midfielder, agreed terms in September on a new deal to keep him at Camp Nou until 2026, including a €1 billion release clause.
Barca filed the paperwork with the league on Wednesday, hoping to formally register Gavi with the first-team squad before the end of the January transfer window next week.
Until now -- despite playing for the first team since 2021 -- the Spain international has technically remained a youth team player.
Sources told ESPN that LaLiga had turned down Barca's request, because the club have no room to register Gavi within their squad spending limit.
The decision should come as no surprise, sources said, as the club were aware they had little to no room to manoeuvre.
Barca were hopeful that the departures of defender Gerard Pique -- who retired in November -- and forward Memphis Depay, who has joined Atletico Madrid, would free up enough space on their wage bill, but LaLiga argues that further action is needed.
As well as Gavi, the contract of Ronald Araujo -- agreed in April 2022 -- is also yet to be registered with LaLiga.
Sources told ESPN that both players are confident the club will be able to resolve the issue soon.
Barcelona's spending limit has been drastically reduced by the club's financial squeeze in recent years.
The club sold off a series of assets last year -- 25% of their domestic television rights for the next 25 years and a 49% stake in Barca Studios -- in a bid to improve the situation and register their summer signings.
That saw their spending cap increase by almost €800 million, but given the scale of the problem, it remains tight.
Gavi has become a key player for Barcelona and Spain over the last two years.
He has made 17 league appearances for Barca this season, and won the 2022 Golden Boy award for Europe's best player under the age of 21.