A statement from the English Premier League said an independent commission found that the club had arranged "sham" contracts and agreements to artificially inflate its revenues and reduce its costs.
Manchester City have been found guilty of all charges related to serious breaches of the Premier League’s financial rules between the 2009-10 and 2017-18 seasons, the league announced on Tuesday.
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In a statement, the Premier League said an independent commission found that the English club had arranged "sham contracts" with commercial partners to "artificially inflate the club’s revenues and reduce its costs."
City has continued to deny any wrongdoing and issued a statement later on Tuesday saying it was "disappointed and surprised" by the commission's opinion. The club has until 2 October to lodge an appeal, which it has said it will do.
The commission found that City had arranged "sham" commercial deals with sponsors as part of a "disguised funding scheme," in which companies were only required to pay part of the relevant sponsorship fees.
"The remainder was funded by Abu Dhabi United Group Investment & Development Ltd (ADUG), which owned the club," the league said in its statement.
Further "sham arrangements" funded by the ADUG enabling the club to record lower operating expenses were also identified.
The league said the schemes inflated City's revenues and reduced its costs by more than £900 million (roughly €1.05 billion) over the affected period.
"Manchester City failed to accurately report its income and expenditure for the purposes of the Premier League’s Profitability and Sustainability Rules and UEFA’s Club Licensing and Financial Fair Play Rules," the statement continued.
Had the relevant agreements been reported accurately, the commission found that the club "would have been in breach of both the League’s and UEFA’s spending limits by a very substantial amount."
The league added that City had also been found guilty on the majority of charges relating to its failure to cooperate with the investigation.
The Premier League launched the investigation into City's finances in late 2018, and charges were filed in 2023.
Richard Masters, the chief executive of the Premier League, called the case and the decision "the most significant in Premier League history" but said certain elements, including sanctions, were yet to be resolved.
"The core decision establishes the facts of what happened at Manchester City during this period. It details how the club systematically broke Premier League Rules for nearly a decade," he added.
In its response, Manchester City said it was "innocent of the accusations made by the Premier League" and that a "comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case."
"Manchester City FC will now pursue the appeal avenues open to it, on the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe," it added.
Ferran Soriano, City's CEO, also hit out what he dubbed the "Premier League's conspiracy theory" as he insisted the club would be "vindicated."
"Very soon, we will look back at this and recognise as another time in our history when we dealt with adversity and overcame it together," he said in a message to club staff.