The veteran striker sparked furore by performing the controversial 'quenelle' gesture, which is widely regarded to be racist or anti-Semitic, after scoring against West Ham on December 28.
Anelka argued the sign was anti-establishment but was charged on two counts by the FA, both of which were proven after a two-day hearing before an independent regulatory commission this week.
The FA then imposed a five-game ban and, although he has the right of appeal, West Brom followed by suspending the player pending the conclusion of the disciplinary process.
The much-travelled Anelka, 34, was allowed to play on while the matter was investigated prior to the hearing but it now remains to be seen whether he features again this season.
The FA's five-match ban will now itself be suspended for a week to allow for Anelkaand West Brom to receive written reasons for the verdict. From then Anelka will have another seven days to lodge an appeal.
Should he decide to appeal, that will then have to be arranged and the ban will be put on hold pending the outcome.
That could take matters close to the end of the season, and relegation-threatened West Brom only have 11 games remaining.
Last month Anelka hinted - in revealing that Lazio were interested in him - that he could retire in the summer.
Yet even though the commission found against Anelka after the hearing at Watford's Grove Hotel, it agreed with him that he had not intended the gesture to be racist or anti-Semitic.
A statement from the FA read: "An independent regulatory commission has found an aggravated breach of FA rule E3 against Nicolas Anelka proven and has issued a five-match suspension and a fine of £80,000, pending appeal."
Anelka will also have to complete an education course as part of the punishment.
The statement added: "So far as the basis for our finding on Charge 2 is concerned, we did not find that Nicolas Anelka is an anti-Semite or that he intended to express or promote anti-Semitism by his use of the quenelle."
West Brom acknowledged this aspect of the finding but sent out a strong message in announcing that they will now be conducting their own investigation.
A statement from the club read: "West Bromwich Albion treats very seriously any such allegation which includes any reference to ethnic origin and/or race and/or religion and/or belief.
"Upon both charges being proven, the club has suspended Nicolas Anelka pending the conclusion of the FA's disciplinary process and the club's own internal investigation.
"The club acknowledges that the FA panel 'did not find that Nicolas Anelka is an anti-Semite or that he intended to express or promote anti-Semitism by his use of the quenelle'.
"However, the club cannot ignore the offence that his actions have caused, particularly to the Jewish community, nor the potential damage to the club's reputation."
West Brom did receive bad press in the weeks following the incident and main sponsors Zoopla announced they would not be seeking to renew their deal in the summer.
Anelka had denied the gesture had any anti-Semitic meaning and said it was a signal in support of his friend, the French comedian Dieudonne M'bala M'bala, who first brought the quenelle to prominence.
Dieudonne has been prosecuted for inciting racial hatred in France and the performer's supporters have been pictured using the quenelle as an anti-Jewish gesture. The comedian has also been banned from entering the UK.
The case was expected to hinge on whether Anelka had any knowledge of the quenelle's anti-Semitic connotations and also whether he could be found guilty of the charge even if he was not aware of the full implications of the gesture, which French minister for sport Valerie Fourneyron has condemned as "shocking" and "disgusting".
The ruling, however, makes clear that players can be sanctioned for behaviour that is widely viewed as racist or discriminatory even if they did not intend it to be so.
A statement from Anelka's legal advisers, Brown Rudnick LLP, read: "Nicolas Anelka is pleased that the FA regulatory commission has found him not to be an anti-Semite and that he did not intend to express or promote anti-Semitism by his use of the quenelle gesture.
"He is now waiting to receive the commission's full reasons for their decision before considering whether or not to appeal.
"Nicolas Anelka has been advised not to make any further comment while the proceedings are ongoing."