Sion have been banned from European football for two seasons and fined €235,000 (£203,000) for breaching UEFA's club licensing criteria.
European football's governing body said the Swiss Super League club owed French Ligue 2 side Sochaux €950,000 (£820,000) following the signing of Ishmael Yartey and -- under club licensing and financial fair play regulations -- should not have taken part in any of this season's UEFA competitions.
However, Sion played a two-legged Europa League third qualifying round match against Lithuania's Suduva -- which they lost 4-1 on aggregate -- last summer.
A UEFA statement read: "The club is excluded from participating in the next UEFA club competition for which it would otherwise qualify in the next two (2) seasons (i.e. 2018/19 and 2019/20 seasons). The Swiss club has also been fined €235,000.''
Sion had been in trouble with the European governing body, and FIFA, in the past over the registration of Egyptian player Essam El-Hadary, who they signed in 2008.
And in 2011-12 they were kicked out of the Europa League for using five players in a clash with Celtic. The players were signed when the club were under a transfer embargo -- and these previous charges did not help their current cause.
Sion sit ninth in the Super League table -- nine points outside the European places -- having won their last two matches.