City have been banned from the Champions League and Europa League for the next two seasons and fined €30 million after UEFA found them guilty of committing "serious breaches" of financial regulations.
The Premier League champions overstated sponsorship revenue in accounts submitted between 2012 and 2016, according to European football's governing body.
UEFA also said City failed to cooperate with an investigation into the matter launched by its Club Financial Control Body.
The shock punishment will cost City an estimated €170 million in lost Champions League revenue and the club reacted furiously, immediately vowing to appeal to the Court of Arbitration for Sport (CAS).