Nottingham Forest have been slapped with a four-point deduction for breaching the Premier League's profitability and sustainability rules, according to reports.
Nuno Espirito Santo's side plan to appeal the verdict, however, as they battle to stay in the top flight for the second season in a row.
With the points deduction in place, Forest have now dropped into the relegation zone.
They are now a point from safety, with Burnley and Sheffield United behind them, with Luton benefitting from the decision.
Nottingham Forest have been slapped with a Premier League points deduction after being adjudged to have broken the rules
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According to the Guardian, Forest plan on fighting the verdict and will lodge an appeal. Official confirmation of the deduction is set to arrive later today.
Forest admitted the breach of the rules but their defence was based around extenuating circumstances regarding the sale of Brennan Johnson.
Johnson was sold to Tottenham late in the summer transfer window.
Forest received an offer of £30million for the player from Brentford but Johnson was unwilling to move to the Gtech Community Stadium.
He instead proceeded to join Tottenham for a huge £47.5m instead, however, after always setting his sights on a move to north London.
Forest, during the summer saga, felt they could get more money for Johnson if they waited beyond the PSR deadline of June 30.
However, an independent panel did not accept this defence - which is why the deduction has been enforced.
Forest argued that their approach was to make them 'more sustainable', with Johnson particularly profitable due to his academy player status.
Premier League clubs are allowed to lose £105m over a three-year period.
Yet Forest's permitted losses were limited to £61m instead due to the club spending two of the three years in the Championship.
The club also insist, as part of their defence, that they were hamstrung after being promoted because investment in the squad is needed to challenge at a higher level.
Forest have signed 42 players since their promotion to the Premier League back in 2022.
During that time they have spent around £250m, though have a mixed record when it comes to recruitment.
Chris Wood, Taiwo Awyoniyi and Anthony Elanga have all been hits at the City Ground.
However, the likes of Jesse Lingard, Omar Richards and Jonjo Shelvey have all failed to live up to expectations during the past 18 months - with Lingard already cut loose and Richards currently out on loan.
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Nuno Espirito Santo and Nottingham Forest are facing a fight to stay in the Premier League
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Speaking over the weekend, Forest boss Nuno was asked about a possible deduction.
He replied by insisting he wasn't nervous about the outcome, saying: "No. Since we had the news that there is going to be a hearing and all these things, we are waiting.
"Let's wait and see. Us, as team, football-wise, we just focus on the pitch.
"We don't know when it's going to come. We prefer the sooner the better."
Forest saw their winless run extended to a fifth game after a 1-1 draw with Luton on Saturday.
Nottingham Forest are planning to appeal their Premier League points deduction
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And Nuno admitted he was frustrated by his side's failure to win the match against their relegation rivals.
“Of course I understand the fans are frustrated, as we are,” the Reds boss said.
“You can see in the dressing room we are frustrated because we did enough to take three points.
“This is how it goes. We are frustrated now but we bounce back and go again, and we expect the support of our fans of course.
“I’m disappointed because I think we did enough to take three points. Let’s wait and see what is going to happen with the decision (over breaching Profitability and Sustainability Rules). We keep on going, keep on fighting.
“We have nine games to go, nine finals to play to put it right. There is a lot of football to be played. No team can say it is totally fine now. We have to focus on ourselves."