Cronulla will be forced to play $350,000 [NZD $364,530] under the salary cap for the next two seasons after the NRL discovered orchestrated attempts to breach the game's rules.
The league announced their findings into the Sharks' salary cap saga on Friday, confirming they had found more breaches than Cronulla had originally self- reported.
Included in those was the establishment of a separate company by an ex-Cronulla board member in 2017 that procured illegal third-party agreements and promises for players.
There is no suggestion of any wrongdoing by Sharks players and any staff members proved to be involved are no longer at the club.
According to the NRL's findings, breaches at Cronulla began in 2013 but only ramped up when the company was set up two years ago.
The NRL found breaches were existent in Cronulla's premiership-winning year of 2016 but, as the club were playing under the salary cap in payments disclosed to the NRL, those promises did not take them above the league's limit.
As such, the club's maiden title was never under threat.
However it means the club will be forced to play with a $353,500 [NZD $368,175] penalty on their cap for the next two years, meaning they will have to offload at least one player before the start of the season.
The club was also fined $750,000 [NZD $781,113] for the breach, but $500,000 [NZD $520,742] of that has been suspended because new chief executive Barry Russell self-reported any breaches he uncovered last year.
"We have no plans to appeal, (and) will deal with the consequences of the fines and punishments," Russell said.
(We) take the positive in that we can now move ahead into the new season and into the future with these matters behind us.
"We now have best governance practices, have learned some hard lessons during this process and I'm confident the systems we have in place will ensure this doesn't happen again."
Meanwhile the club's $800,000 [NZD $833,187] fine for communicating with coach Shane Flanagan during his 2014 ban from the peptides scandal was reduced to $500,000 [$NZD $520,742].
Flanagan's return to the game also appears difficult, after his deregistration was upheld.
The NRL said they would consider any application for him to be employed by a club in the future, but it will not be approved in the short term.