The Dutch football association's licensing commission plans to relegate FC Twente to the second tier to punish the 2010 Eredivisie champions for "repeatedly and deliberately misleading" football authorities and other clubs about their finances.
A Dutch professional players' council has two weeks to consider the proposal and issue a non-binding opinion before the decision is finalized.
Twente, who finished 13th in the Eredivisie last season, can appeal.
Club interim director Onno Jacobs said the club's management was "shocked, disappointed and full of disbelief" and would carefully study the written decision before deciding on the next step.
"This feels ... like a hammer blow," Jacobs said, while urging the club and their fans to remain calm.
The licensing commission had the power to revoke Twente's professional playing license altogether, but said on Wednesday it wants to give the Enschede club a second chance because of recent efforts to restore order.
In December, the Royal Dutch Football Association (KNVB) banned Twente from European competition for three years for a deal to sell player transfer fee rights to an outside investor.
"We feared the licensing commission would pull the plug completely," said KNVB director Bert van Oostveen. "Luckily the commission has found a way out.
"FC Twente is a big club with a lot of supporters and the KNVB is pleased the club has been given a second chance."