Rangers will start the new season in the Irn-Bru Third Division following a vote by Scottish Football League chairmen at Hampden.
The 30 SFL teams were voting on whether Charles Green's newco Rangers should enter the league and which division they should be placed in.
The Scottish Premier League and Scottish Football Association were hopeful Rangers would be parachuted into the First Division, with SFA chief executive Stewart Regan claiming that putting the Ibrox club into the Third Division would bring financial catastrophe and a 'slow, lingering death' of the game.
Twenty-nine of the 30 SFL clubs accepted Rangers as an associate member of the Scottish Football League while 25 clubs voted in favour of placing the newco team into the bottom tier.
SFL chief executive David Longmuir said: 'The member clubs of the Scottish Football League have today voted to willingly accept The Rangers Football Club as an associate member of the Scottish Football League.
'Furthermore, the Scottish Football League's only acceptable position will be to place Rangers FC into the Third Division of the Irn-Bru Scottish Football League from the start of this season.'
Longmuir also stated that he was 'comfortable' with the outcome of the vote and that the decision from the SFL clubs was taken with the sport's best interests at heart.
He said: 'I'm comfortable today that the Scottish Football League made a very, very decisive decision that was based on sporting fairness and I think the Scottish Football League were in the right place to make that decision.
'This decision followed a tried-and-tested process and was taken in cognisance with the other options which were available for consideration.
'Today's decision has been one of the most difficult for all concerned but it has been taken in the best interest of sporting fairness which is the fundamental principle of the Scottish Football League.
The Scottish Football League has been entirely consistent with our willingness to work with other bodies to ensure that we focus on rebuilding our game, restoring pride in our game and exploring revenue streams and our willingness to achieve these aims does not alter.'
Raith Rovers chairman Turnbull Hutton revealed that Green, Regan and Rangers manager Ally McCoist addressed the meeting and said: 'It was a good meeting that was handled well and all the issues came out. There was also a good hearing for those who came into the meeting.
'The league made a decision and I think it was the right decision and the right process and I'm proud to be a member of the Scottish Football League.'
Dunfermline chairman John Yorkston said it would not be a shock to see the SFA and SPL formulating plans for an SPL2, something which has already been mooted.
'That wouldn't surprise me,' he added. 'The 10 First Division clubs sent out a message today saying that we are looking for a 42-club solution, the vote was 25 to five so I think that was fairly unanimous.'