Wolves have been found guilty over FFP breach.
Wolves have reportedly been punished by UEFA after breaching Financial Fair Play rules.
In the aftermath, Wolverhampton will be allowed to have only 23 members in the squad if they qualify for the Champions League next season.
Wolves have also agreed to pay €20,000 in fines, which could go up to €60,000.
A statement from UEFA read: “The settlement agreement covers the sporting seasons 2020-21 and 2021-22.”
“Wolverhampton Wanderers undertakes to report a maximum break-even deficit of 30 million euros in the financial year ending in 2020 and to finally reach, in the 2021-22 season, an aggregate break-even results for the financial years ending in 2019, 2020 and 2021 within the acceptable deviation.”
UEFA also pointed out that the squad restriction will continue for the 2021/22 season if Wolves fail to meet the required financial measures.
LOSC Lille and Istanbul Basaksehir are also the victims for the FFP breach.
Wolves have progressed to the quarter-finals of Europa League after beating Olympiacos 2-1 on aggregate. Raul Jimenez scored the only goal of the game in the second leg.
They will face Sevilla next week in the quarter-final.
As a result of the misconduct, Wolves’ Champions League hopes are in jeopardy and are forced to win this season’s Europa League.
Furthermore, Wolves are reportedly in talks to extend Nuno Santo’s contract. The Portuguese manager’s current deal runs until the end of next season.