Saracens have been deducted 35 points and fined £5.3 million for salary cap breaches, Premiership Rugby announced on Tuesday.
An independent disciplinary panel said Saracens failed to disclose player payments in each of the last three seasons.
In the event that Saracens appeal the decision, the sanctions will be suspended pending the outcome of the review.
A Premiership Rugby spokesperson said: “The salary cap is an important mechanism to ensure a level playing field for Premiership clubs and maintain a competitive, growing and financially sustainable league.
“Today’s decision by the Independent Panel upholds both the principle of the salary cap and the charges brought following an extensive investigation by Premiership Rugby.
“We are pleased that this process has reached a conclusion and we look forward to another exciting season of Premiership Rugby.”
Saracens won the Premiership and European Cup last season, but the sanction will send them bottom of the table with -26 points.
The club would have finished 10th in the table had they received the same punishment last season.