The Senegalese Professional Football League (LSFP) handed a seven-year ban to US Ouakam following the crowd trouble which left eight people dead during the League Cup final against Stade de Mbour last month.
The LSFP's disciplinary committee said it holds US Ouakam "exclusively responsible" for the tragedy at the Stade Demba Diop on 15 July.
US Ouakam were further punished with a demotion to the lowest tier of Senegalese football at the end of their seven-year suspension.
The 2011 Senegalese League Champions have also been issued with a fine of 10 million francs (CFA) with Stade de Mbour being awarded the trophy as winners.
US Ouakam haad been temporarily banned in the immediate aftermath of the tragedy which started moments after visitors Stade de Mbour had taken a 2-1 lead in extra-time.
That goal resulted in the collapse of a wall following fighting between fans.
US Ouakam said they will appeal the decision.
"We are going to appeal this penalty, which seems to us to be heavy and disproportionate, the Commission has been too heavy handed," Club President Abdou Aziz Guèye told local media.
"We are not sure that these kinds of sanctions will put an end to the violence in our country," he added.
US Ouakam have been suspended by Senegal's Football Federation (FSF) following a stampede which resulted in the deaths of eight fans.
Nearly 100 other spectators were injured as Ouakam fans clashed with those of rivals Stade de Mbour during Saturday's League Cup final.
"US Ouakam are temporarily suspended," the FSF said in a statement.
The FSF's disciplinary committee will decide on sanctions against Ouakam shortly, it added.
The AFP news agency said multiple witnesses reported seeing Ouakam fans throw stones and other objects at the Mbour supporters.
This came moments after the visiting side had taken a 2-1 lead in extra-time of
A wall at the Demba Diop stadium in the capital Dakar collapsed following the fighting between fans.
Police responded with tear gas, sparking the stampede.
"My thoughts with those who lost loved ones or were injured during (the) tragic stampede at Demba Diop Stadium. Heartfelt condolences," tweeted Fifa Secretary General Fatma Samoura, who is Senegalese.
While US Ouakam - the 2011 Senegalese champions - hail from Dakar, Stade de Mbour are based 80km (50 miles) further south.
On Sunday, Senegal's government announced an inquiry into the disaster while suspending all sports and cultural events until political elections take place at the end of the month.
Eight people were killed during Senegal's football league final in Dakar on Saturday in a stampede that broke out following clashes at the end of the match, the official APS news agency said.
A wall collapsed at Demba Diop stadium as people attempted to leave after the game between local teams Ouakam and Stade de Mbour, APS reported.
Police fired tear gas at clashing supporters from both teams who were throwing projectiles, and panic spread in the stadium leading to a crush.
At least 49 were seriously injured in the confusion, APS said, while firefighters were on the scene along with large numbers of ambulances.
Senegal's safety record at large gatherings has been heavily criticised this year after the death of dozens of people at a religious retreat in April when a fire ripped through makeshift shelters.
Gambia's President Adama Barrow has returned to the country to assume power - days after his predecessor Yahya Jammeh left to go into exile.