Penn State is slapped with a big fine and banned from the playoffs for four years.
The National Collegiate Athletic Association has banned Penn State from playoff games for four years.
The university was also slapped with a $60 million fine.
The punishment was in response to coverup by the university of child abuse by a former football coach.
Penn State's football team, one of the most successful and lucrative U.S. college sports machines, was slapped Monday with a heavy fine and a four-year playoff ban over a damaging child sex abuse scandal.
The National Collegiate Athletic Association, the governing body for U.S. college sports, said that the severe punishment was merited due to leadership failures and a warped team culture revealed by the scandal.
NCAA president Mark Emmert called the case "tragic" and said "an argument can be made that the egregiousness of the behavior in this case is greater than any other seen in NCAA history."
The team must pay a $60 million fine -- equivalent to one year's income -- and it will be banned from postseason bowl games for four years.
Also the official record from 1998 through 2011 will be altered to remove Penn State's many victories. The recently deceased head coach, Joe Paterno, had before been lauded as the coach with the most all-time wins.
Paterno was never charged, but he was seen as part of a failure by university management to respond to indications that an assistant coach, Jerry Sandusky, was flagrantly abusing children for years.
An independent report into the scandal found evidence of a broad cover-up that allowed Sandusky to continue abusing impressionable boys that he hosted at the university and on trips as part of charity work.
"No matter what we do here today, there is no action we can take that will remove their pain and anguish," Emmert told a televised press conference.
"But what we can do is impose sanctions that both reflect the magnitude of these terrible acts and that also ensure that Penn State will rebuild an athletic culture that went horribly awry."
Sandusky is behind bars awaiting sentencing after being convicted last month of molesting 10 boys during a 15-year period.