Sheffield United will start next season on minus two points if they are relegated to the Championship after the Blades defaulted on payments to other clubs in the 2022/23 campaign - when they beat Middlesbrough to automatic promotion.
A further two-point penalty has been suspended until the end of next season, the EFL said.
This will be triggered if United default on any payment to another club under a transfer or compensation agreement for more than five business days from the due date of payment.
The EFL said the defaults which led to the sanction were cumulatively in excess of 550 days. The club also agreed to pay the EFL’s costs of £310,455.
Sheffield United are currently bottom of the Premier League, nine points off safety with seven games left to play.
The Blades went up after finishing second in the Championship last season. At one stage it appeared Boro were going to beat United to automatic promotion, but Michael Carrick's side stuttered in the final weeks.
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In a statement, Sheffield United said: "It has been agreed that the Blades will commence the next season in which the club is subject to the EFL's jurisdiction with a two-point deduction. The club's position in the proceedings was that the relevant sums relied on by the EFL had been paid in full, on several occasions only days after they were initially due, or renegotiated with new future payment dates adhered to before the club was notified of the referral.
"The club has co-operated with the EFL to reach a negotiated settlement on the issues in question.
"While disappointed to have the deduction imposed upon the return to the EFL and highlighting that awaiting overdue monies from several other clubs affected Sheffield United's financial situation, the club took the view that it was better to reach an agreement which minimised the risks of a higher deduction or further transfer embargoes being imposed, and being distracted by lengthy and costly legal proceedings.
"The club is now in a position to close this matter and concentrate on the future."
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