Palermo have been relegated to Serie C by the Italian Football Federation (FIGC) because of financial irregularities, in a move that effectively ends their hopes of securing promotion to Italy's top division.
Relegated from Serie A last season, Palermo finished third in Serie B this term, earning a place in the promotion playoffs in which they were due to play their first match next week.
Instead, an FIGC tribunal ruled that the club would be placed last in the 19-team table, condemning them to relegation to the third tier.
"The club was sanctioned for a series of management irregularities by some former managers," the tribunal said in a statement on Monday.
There was no immediate response from the Sicilian club, although an appeal could force the playoffs to be postponed.
Palermo owner Maurizio Zamparini sold the club to British-based Sport Capital Group for the symbolic price of €10 in December.
Three months later, ownership was transferred to Zamparini's associates Daniela De Angeli and Rino Foschi. Last week, the club was taken over again, this time by Italian-based Arkus Network.
In 2017, a takeover bid from U.S.-born businessman Paul Baccaglini was rejected by Zamparini more then four months after it was announced that terms had been agreed for the deal.
Zamparini was in charge at Palermo for 16 years, famously hiring and firing over 40 coaches during that period.
Languishing in Serie B when he took over in 2002, pink-shirted Palermo won promotion in 2003-04 as they returned to the top flight after a more than 30-year wait.
In Zamparini's first few years they routinely finished in the top half of the table, played in the UEFA Cup several times and had four members of Italy's 2006 World Cup-winning squad.
Players such as Uruguay forward Edinson Cavani and Argentine pair Paulo Dybala and Javier Pastore played at the club early in their careers.
Palermo's fortunes faded after that and they were relegated in 2013 but returned to Serie A at the first attempt.
They narrowly avoided another relegation in 2016 after an extraordinary season in which the club employed seven different coaches, two of them twice, but finally went down in 2016-17.
Information from Reuters and the Associated Press was used in this story.