Portsmouth have been docked nine points by the Premier League for going into administration last month.
It means the bottom-placed side are now 17 points from safety with nine games left, making them almost relegation certainties.
With debts of about £65m, Pompey became the first club in the history of the Premier League to enter administration.
The announcement came a day after HM Revenue and Customs (HMRC) formally dropped its challenge over the validity of the club’s move into administration.
In a statement, the Premier League said: “Following the High Court’s decision that Portsmouth FC’s administration is valid the Premier League board convened to apply the League’s rules and policies in relation to a member club suffering an event of insolvency.
“As a result Portsmouth FC has been deducted nine points with immediate effect. As part of this process the board met with the administrator to agree how we will work together for the remainder of the season to ensure that the club is able fulfil its commitments.”
Premier League rules dictate that clubs entering administration are automatically deducted nine points and means Avram Grant’s side are now 14 points behind Burnley and Hull, in 18th and 19th spot.
However, the club’s administrator Andrew Andronikou has previously indicated that the penalty could be challenged, saying: “Yes, it is a Premier League rule but that rule has never been tested, and that’s what I will do.”
The league’s board also met with Andronikou “to agree how we will work together for the remainder of the season to ensure that the club is able fulfill its commitments.”
Grant said last month that that the fans should not be the ones to suffer for the club’s financial problems.
“The fans should not be victims in this scenario,” he said. “Of course, we should not be docked nine points. All my life I have been fighting for justice and in the interests of fair play, we need football to be decided on the field.
“Maybe someone, somewhere, will think about the fans, who have done nothing wrong.”
The club opted to go into administration ahead of a scheduled winding up order from HMRC, and announced last week they had axed 85 jobs.