US National Collegiate Athletic Association (NCAA) has fined Penn State University 60 million dollars in connection with a sex abuse scandal committed by long-serving football coach Jerry Sandusky.
The university, a famous US football school, also loses all victories from 1998-2001 and will face a four-year ban from competing for honors.
US college sport authorities said the punishments are "corrective and punitive".
Sandusky faced 52 criminal counts that he sexually abused 10 boys over 15 years, allegations he has denied. His arrest and the fallout led to departures of longtime football coach Joe Paterno and the university president.
“Football will never again be placed ahead of educating, nurturing and protecting young people," NCAA President Mark Emmert was quoted as saying.
"This case is obviously incredibly unprecedented in every aspect of it, as are these actions that we're taking today," he said.
The sex scandal has sullied the squeaky clean image of Penn State's former head football coach Paterno, who died in January, months before the resolution of the case. Paterno had won more college football games in his long career at Penn State than any other head coach in university sport.
A university-commissioned investigation, led by FBI, concluded in July that Paterno and several other top officials at Penn State remained tight-lipped for years about accusations against Sandusky.
There had been calls across the nation for Penn State to receive the "death penalty”, a punishment meted out to teams that commit a major violation while already being sanctioned.