Saracens have been docked 35 Premiership points and fined £5.36million for breaching salary cap regulations.
The Premiership and European champions were ruled to have exceeded the ceiling for payments to players in each of the last three seasons.
Premiership Rugby launched an investigation in March after it was revealed that high-profile Sarries players had entered into investment or property partnerships with club owner Nigel Wray.
The London club, champions of England in four of the last five seasons, have insisted all along they are in compliance with rules and salary regulations but now face a huge fine and a battle to avoid relegation.
Saracens have the right to appeal against the sanctions, which will be suspended if they mount a challenge.