Cronulla have been handed a reduced $250,000 fine and will be forced to play under the salary cap by $350,000 over the next two seasons for cheating the salary cap.
The NRL handed down their findings from their long-running probe into the club's salary cap on Friday.
Cronulla were to originally be fined $750,000 but had $500,000 wiped due to Sharks CEO Barry Russell's decision to self report the original matter.
The Sharks will also have to play $350,000 under the salary cap for the 2019 and 2020 seasons and will need to shed one player before round one in a fortnight. Though NRL chief operating officer Nick Weeks said the NRL were confident the Sharks would be under the cap before round one.
NRL CEO Todd Greenberg said it had been shown in the past the "significant impact" this sort of punishment can have on a club's ability to compete and that the fines would have been "significantly" higher had Russell not self reported.
"I hope every other club takes notice," he said.
“I would hope that the sanctions being handed down today will remind clubs and players that there are significant consequences for not complying with the standards and rules we set for our game.
"We're doing what's right. Not what's popular."
Russell self reported a promised $50,000 payment to former Sharks forward Chris Heighington in June last year.
That sparked a wider probe which saw the Sharks lose premiership-winning coach Shane Flanagan who has been deregistered indefinitely.
Evidence was found that Flanagan had communicated with the club during his 12-month ban for his role in Cronulla's ASADA scandal in 2014.
It is understood further breaches of the salary cap were found dating back to 2013. The Sharks were found to have set up a company to attempt to procure third-party payments for their players, with promises made for around $750,000 worth of illegal payments.
But Cronulla's historic 2016 premiership is safe as they were under the salary cap that season, as is the contract of star signing Shaun Johnson.
The Sharks will need to offload one player before the start of the season to be cap compliant for 2019 but it does not have to be Johnson.
Flanagan, who resigned as Cronulla's head coach in January, has had his deregistration continued indefinitely.
Greenberg said Flanagan's response to his breach notice had been considered but his deregistration would stand. If Flanagan applies in the future to become a registered official it would be considered, but Greenberg said Flanagan would not be considered in the short term.
Cronulla were originally fined $800,000 for engaging with Flanagan during his ban but that has been reduced to $500,000 after the club acknowledged and accepted its wrongdoing.
"I'm not sure I'd consider [Flanagan] at the moment. He needs to spend some time away from the game," Greenberg said.
"If Shane wants to coach in England we wouldn't stand in his way."
Greenberg said the NRL could not afford to ever have an off-season like this again in announcing a number of sanctions against players and clubs.
As well as the Sharks, the NRL have halved Wests Tigers' fine to $350,000 for failing to disclose an ambassador agreement with Robbie Farah when he finishes his career and for misleading the NRL in relation to an application for cap relief.
The Tigers' $639,000 salary cap punishment can also now be spread over the next two seasons. Tigers CEO James Pascoe has been suspended for six months and can return to the club in June.
Dylan Napa was fined 10 per cent of his 2019 salary following the publication of several lewd videos featuring him. The NRL decided not to suspend him because it was judged as a "historical incident" with the videos dating back five years.
The NRL has also suspended Scott Bolton for 10 weeks and fined him five per cent of his 2019 salary after pleading guilty in January to common assault involving a woman last year.
But the NRL will halve the penalty if the Cowboys forward agrees to address the captains and senior players of all other teams during this year’s Magic Round in Brisbane in May.
Manly's Dylan Walker was also stood down under the NRL's new 'no fault' policy until the end of his court case. Walker has pleaded not guilty to charges of assaulting his fiancee.
“The NRL stresses that we are making no judgement on his guilt or innocence. That is a matter for the courts,” Greenberg said.
The NRL also stood down Dragons forward Jack de Belin on Thursday after the governing body announced a major change to the game's disciplinary policy.
The Australian Rugby League Commission handed down new protocols for players accused of serious crimes. Under the new policy, any player who is charged with an offence that carries a maximum prison term of 11 years or more will be automatically stood down.
Greenberg also has discretionary power to stand down players charged with offences involving the assault of women or children. Players will be allowed to continue to train with their teams and remain on full pay.