Dynamo, who qualified for the Europa League after finishing fourth in the Russian championship, have been banned from European competition for one season.
"Dynamo Moscow will be excluded from participating in the next UEFA club competition... because it has failed to comply with the break-even requirement set out in Articles 58 to 63 of the UEFA Club Licensing and Financial Fair Play Regulations," UEFA said in a statement.
The club have been spared financial sanctions or a transfer embargo and will be able to take part in the UEFA Youth League.
The club's president Boris Rotenberg said he was disappointed with the ban, but added that the decision was not completely unexpected.
"I can't say that we were particularly surprised by UEFA's ruling," he said in a statement on the club website (www.fcdynamo.ru).
"Discussion about Financial Fair Play did not start today or yesterday. This is why during the winter, we did not sign one new player, which had an effect on Dynamo's performance in the spring part of the championship."
He told the TASS news agency that Dynamo may appeal the decision.
FFP was introduced in 2010 in an attempt to prevent rich owners from pumping unlimited amounts of cash into clubs and distorting the market. Under the rules, clubs who take part in European competition cannot spend more than their generated revenue.
Other clubs who have fallen foul of the rules include Manchester City and Paris St Germain, who were fined up to 60 million euros ($68.05 million) last May and had their squads capped for last season's Champions League.
Inter Milan, Monaco and AS Roma all agreed to pay fines and reduce the size of their squads in European competition last season after breaking FFP rules.
UEFA president Michel Platini, however, suggested in May that FFP could be "eased" with the executive committee set to discuss the idea.
Rotenberg said he hoped the ban would not have too great an impact on Dynamo, who were knocked out of last season's Europa League in the last 16.
"I am sure that even if we cut our spending, Dynamo will be able to fight for the top positions. I am sure next summer that we will be able to qualify for Europe," he said.
Rubin Kazan, who finished fifth in the Russian championship, are likely to take Dynamo's place in the Europa League.
(Reporting By Dmitriy Rogovitskiy; editing by Toby Davis)
Share
