Chelsea must pay Manchester City an initial fee of £3.5million for Daniel Sturridge with the striker's transfer potentially cost the Londoners around £7million.
The Professional Football Compensation Committee hearing ruled a compensation payment of £3.5million was due, with additional payments of £500,000 due after each of 10, 20, 30 and 40 first-team competitive appearances in all competitions.
A further payment of £1million will be due if Sturridge makes a full international appearance, while City will be due a 15 per cent sell-on fee if the 19-year-old leaves Stamford Bridge.
A statement read: “Chelsea FC will pay an initial fee of £3.5million with additional payments of £500,000 after each of 10, 20, 30 and 40 first-team competitive appearances.
“There will be a further payment of £1million if the player makes a full international appearance. Manchester City will receive 15 per cent of any sell-on fee if the player is transferred.”
Sturridge joined Chelsea in July on a four-year deal after his contract expired at City.
“The two clubs could not agree a fee and, because of his age, City were entitled to some recompense, which was determined by the tribunal.”
Sturridge, nephew of former Derby forward Dean, made a total of 30 appearances for City, scoring six times, and has made eight appearances for Chelsea, finding the net twice.