Everton have been banned from signing academy players who have been registered with another Premier League or EFL club in the preceding 18 months for two years after breaching recruitment rules.
The suspension comes after Everton admitted to the Premier League that academy staff had offered inducements to a player and his family to encourage him to register with the club, with a subsequent inquiry revealing similar breaches had taken place in relation to six other academy players.
A statement from the Premier League read: "The Premier League has sanctioned Everton FC for breaching Academy player recruitment rules.
"The Premier League received evidence alleging that Everton Academy staff offered inducements to a player and his family to encourage the player to register with the club. When presented with this information, Everton immediately admitted the allegations and set up its own internal inquiry which established that similar misconduct had occurred in relation to six other Academy players.
"In certain cases, it was found that the club provided false information to the League when questions had previously been raised about the circumstances in which Academy players registered with the club.
"The club will pay a fine of £500,000 and will be banned for two years from registering any Academy player who has been registered with another Premier League or EFL club in the preceding 18 months. The club will also pay additional compensation payments to the former clubs of two Academy players."
In response Everton said in a statement: "Everton has worked alongside the Premier League over recent weeks to conduct a full and thorough investigation into allegations relating to our Academy's operational methods in some areas of player recruitment.
"In short, we are extremely disappointed with some of the practices we have found which are not in line with our values and not acceptable to Everton Football Club. Accordingly, we have accepted the penalties imposed on us by the Premier League and have given them our strongest apologies.
"We have already commenced a full review of our Academy operations and are committed to ensuring that issues like this do not happen again at Everton."