Sydney United 58 have been fined A$15,000 (£8,500) by Football Australia (FA) after some Fans displayed Nazi symbols and salutes in the Australia Cup final last month.
It also handed down several suspended sanctions, which include further fines, points deductions and a suspension from the Australia Cup.
Sanctions will be triggered if the club fails to meet certain conditions.
FA chief James Johnson said the fans’ actions had caused “deep hurt”.
“Football Australia has run a thorough and considered process that includes listening to many different views and lived experiences,” Johnson said.
“What resonates strongly is the deep hurt and impact of actions that do not represent the values and expectations of our game or protect our community.”
The FA had previously issued a lifetime ban to a spectator who made a “fascist salute or similar gesture” during the final, where semi-professional side Sydney United 58 lost 2-0 to Macarthur FC at Western Sydney Stadium.
The first non-A-League team to reach the final, Sydney United 58 were previously known as Sydney Croatia.
Johnson said the actions of some supporter groups were “disrespectful and deeply offensive” to the Indigenous Australian and Jewish communities.
There were chants and cheers during an indigenous welcoming ceremony before kick-off.
“As a result, we have acted decisively in a manner that reflects our desire to eradicate this behavior from Australian football,” Johnson added.
“The sanctions imposed on Sydney United 58 FC reflect the seriousness with which we have viewed this situation and we believe it sends a clear message that this type of behavior will not be tolerated.”
In order to avoid triggering the suspended sanctions, Sydney United will be required to engage in voluntary work with Indigenous and Jewish communities and the club’s board, players, staff, volunteers and supporters group leaders will be required to complete mandatory training to combat ‘racism, discrimination. anti-Semitic and other religious hatred”.
They should also complete cultural competency training and implement cultural initiatives within the club.
Former Australian international and National Indigenous Advisory Group (NIAG) co-chairman Jade North said he was “heartbroken” by the measures taken.
Darren Burke, head of the New South Wales Jewish Board of Deputies, said the displays at the Australia Cup final “were some of the ugliest scenes we have seen from spectators at a football game in our country”.
“Football Australia’s response to these sad incidents is commendable. We hope the sanctions imposed on Sydney United will serve as a warning to other clubs that racist behavior of any kind will not be tolerated,” he added.