Saracens will be relegated from the Rugby Premiership at the end of the season after breaching the salary cap limit.
The London-based team were deducted 35 points and fined £5.3m in November, having broken the cap for the past three seasons.
Darren Childs, chief executive of Premiership Rugby, said: "Premiership Rugby is prepared to take strong action to enforce the regulations governing fair competition between our clubs.
"At the conclusion of dialogue with Saracens about their compliance with the Salary Cap Regulations, it has been decided that Saracens will be relegated at the end of this season.
"At the same as enforcing the existing regulations, we want to ensure a level playing field for all clubs in the future, which is why we have asked Lord Myners to carry out an independently-led review of the Salary Cap."
The club, bottom of the table with minus seven points, will continue to compete in Gallagher Premiership Rugby until the end of the season.
Neil Golding, chairman of Saracens, said: "As the new chairman of Saracens I acknowledge the club has made errors in the past and we unreservedly apologise for those mistakes.
"I and the rest of the board are committed to overseeing stringent new governance measures to ensure regulatory compliance going forward."
The charges relate to a failure to disclose player payments in each of the 2016-17, 2017-18 and 2018-19 seasons.
The Premiership champions have won four of the last five titles - beating Exeter Chiefs in the last two Premiership finals
Tony Rowe, chief executive at the Exeter Chiefs, told the BBC he was relieved Saracens were facing such a punishment.
"Let's be very honest about this before people have sympathy with Saracens,” Rowe said.
"They had two choices: They could either open up their books so that Premiership Rugby could do a forensic audit of exactly what has gone on, or they could take relegation. So it was their choice not to open up their books.
"We just want to move on. They have cheated. And I'm just a bit upset it has taken so long to do this. At the moment they are still picking their team each week largely from the squad they had last year, which is still in breach of the salary cap."
Elsewhere Sale Shark's director of rugby, Steve Diamond, said the news was "disappointing".
"I've just operated on 50% of the salary cap for 10 years and managed to qualify for Europe in five of those 10 years, and it's disappointing to know that a team have been cheating.
He added: "The powers that be have decided that it is obviously the right punishment so we get on with it."
Relegation to the second tier might mean Saracens are unable to retain their top players, the likes of England captain Owen Farrell and flanker Maro Itoje.
Such players might be able to enjoy similar salaries by playing in France's Top 14, but that would prevent them from being allowed to play in England.
Former Saracens and England player Andy Goode explains the salary cap:
What is the salary cap?
Premiership Rugby introduced its salary cap in 1999 to ensure the financial viability of all clubs and the competition.
On their website, Premiership Rugby says the cap helps "to provide a level playing field for clubs".
The salary cap focuses on the combined salaries of each player at the club within the salary cap year - 1 July to 30 June. As a result there is no restriction to individual player's salary, but on the whole squad spend.