Derry City's League of Ireland contract has been terminated after the club admitted holding secondary, unofficial contracts with players.
The move sees the club removed from this year's Premier Division and they must now reapply to become part of the league.
An FAI delegation will meet with Derry this week and the various other stakeholders to consider how the Candystripes may participate in senior football in the league, at some level other than in the Premier Division.
It means that Galway United are now safe from relegation, with bottom club Bray Wanderers now facing Drogheda United in the play-offs, starting on Tuesday.
Derry's Setanta Cup match this week has been postponed, pending discussions with the Irish Football Association, through the Setanta Sports Cup Committee.
The Derry board finally came clean with the league's governing body on Thursday when it arranged a meeting with the FAI and admitted that unofficial deals were reached with staff that saw them earn extra funds.
This helped the club find a way around the rule that all clubs under licensing regulation must not spend more than 65percent of their income on wages.
It is the latest blow to the league which has been dogged with financial trouble for the last few years.
Cork City narrowly survived going out of existence earlier this season, and may not get permission to compete in the top division next year.