Manchester City and Paris Saint-Germain will receive huge fines and reduced Champions League squad allowances, the Telegraph reports.
They are two of nine clubs who are currently under investigation for breaching Financial Fair Play (FFP) regulations.
Manchester City will receive a €60m (£49.3m) fine, the highest fine in the history of football, and will only be allowed to register 21 players for the Champions League next year, as apposed to the usual 25.
The Club Financial Control Body (CFCB), which monitors FFP, has deemed that City's sponsorship contract, which is worth £35m a year, can not be used to balance out their excessive transfer spending, as it contradicts FFP regulations.
UEFA permitted clubs to make losses of £37m during 2011 and 2013 whilst FFP was being phased in, but City reportedly made a loss of £149m.
City are reportedly considering objecting the CFCB verdict, which could result in a reexamination.
PSG, on the other hand, have a £166m a year contract with Qatar airways, which the CFCB also sees as not being permissible to balance out losses.
PSG has apparently reached agreement to accept four UEFA sanctions, the first two of which are identical to Manchester City's punishment.
Additionally, eight players in their Champions League squad will need to be homegrown, and their £200m wage bill may not increase further.
Neither clubs, however, will be excluded from taking part in the Champions League.
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