Premier League leaders Manchester City became the first of the 12 founder clubs to withdraw from the newly-created European Super League (ESL) on Tuesday as the project disintegrated.
Chelsea were earlier reported by the BBC to be preparing the paperwork to quit the controversial new competition, but City made it official.
A brief statement on its website read: "Manchester City Football Club can confirm that it has formally enacted the procedures to withdraw from the group developing plans for a European Super League."
City were one of six English clubs to join the new competition on Sunday, triggering a torrent of condemnation from within the game and beyond and threats of sanctions by European soccer's governing body UEFA.
"I'm delighted to welcome City back to the European football family... It takes courage to admit a mistake but I never doubted they had the ability and common sense to make that decision.
City are a real asset for the game," he said in a statement.
City's dramatic U-turn came hours after manager Pep Guardiola spoke out against the competition.
The Spaniard said the ESL went against the ethos of sport as 15 of the 20 clubs involved would be permanent members without the threat of relegation.
"It is not a sport where success is already guaranteed or it is not a sport when it doesn't matter if you lose.
"It is not fair when one team fights to arrive at the top and cannot be qualified because the success is already guaranteed just for a few teams."
Guardiola said he had been told of the ESL proposal hours before it was announced on Sunday, and called on Real Madrid president Florentino Perez to explain his position.
The club's website carried Guardiola's candid quotes, a hint that they were less than committed to the ESL.
City and their fellow English breakaway clubs -- Manchester United, Chelsea, Liverpool, Arsenal and Tottenham Hotspur -- have come in for fierce criticism for their plan to join the ESL, even from their own fans.
Earlier in the day the Premier League's 14 other clubs met to discuss the crisis along with the Football Association.
With City and Chelsea out and Liverpool's players posting a shared Twitter message saying they want no part of it, the project now looks doomed.
British Prime Minister Boris Johnson, who had threatened legislation to stop the six taking part, said shortly before City confirmed their exit that it would be welcome news.
"The decision by Chelsea and Manchester City is -- if confirmed -- absolutely the right one and I commend them for it," he said. "I hope the other clubs involved in the European Super League will follow their lead."