UEFA has approved the rule to raise the number of homegrown players that must be in squads competing in their European competitions.
As a result clubs will be required to have four homegrown players in their squads by 2006/2007, increasing to six the following season and eight by 2008/2009.
The rule also states that half of the homegrown players should be trained by the club, while the others can come from a club academy in the same country.
The new rules will apply to clubs playing in Champions League and Uefa Cup matches and while that might not be a problem for teams in Wales, will certainly have to be taken into consideration by teams in England and Scotland.
UEFA vice-president Per Ravn Omdal said: "This is of fundamental importance to the future of football.
"You may think that four out of 25 is a low number and it is but we want a limited and moderate step here so that the clubs can keep in line with our new rule by 2008-09."
At present, clubs can select 25 players for their European squads, with no limits imposed on them.
UEFA defines "club-trained players" as anyone with a club for three years or more and aged between 15 and 21, while an association-trained player is someone of the same criteria but he could have been signed from another club.
There is no limit set on club-trained players, so any side can fill their quota with them - but you cannot have more than the specified association-trained players, meaning clubs cannot just buy players in to meet the criteria.
Any side unable to meet the new rules will have their squad size reduced by the number of players they are short.