UEFA announced a decision on Wednesday that sees Milan “excluded from participating in the next UEFA club competition for which it would otherwise qualify in the next two seasons”.
The ruling is subject to a potential appeal to the Court of Arbitration for Sport.
Milan qualified for the Europa League group stages by finishing sixth in Serie A last season following a resurgence under Gennaro Gattuso.
Though they will not, as it stands, be permitted to compete in Europe’s second-tier club competition, Milan will be free to play in the Champions League or Europa League in 2019-20 should they qualify for either tournament.
The club’s CEO Marco Fassone has already indicated Milan intend to appeal, earlier telling Tuttosport: “In the case of an unfavourable sentence, we can appeal to CAS.”
Milan were taken over by a consortium headed by Chinese businessman Li Yonghong, who then became the club’s chairman, in April last year.
The club subsequently spent big prior to the 2017-18 campaign, signing the likes of Leonardo Bonucci, Andre Silva and Hakan Calhanoglu.
Gattuso replaced the sacked Vincenzo Montella in November, also leading them to the final of the Coppa Italia, where they lost to Juventus, and the last 16 of the Europa League, a run which ended with defeat to Arsenal.