Dynamo, who reached the Europa League last 16 this season, will not be allowed to compete in next season’s competition.
Club president Boris Rotenberg said: “I can’t say that the UEFA decision came as a big surprise for us.??
“We’re sure that, under the terms of a necessary cut to the wage bill, Dynamo will still be able to fight for top places. I don’t doubt that next summer we’ll be back competing in Europe.”
The club’s place will likely pass to Rubin Kazan, who finished fifth in the Russian league, one place behind Dynamo, although this has yet to be confirmed.
Dynamo had been under investigation for overspending after the club spent more on player transfers and wages than its football-related revenue in 2014 financial accounts.
Rotenberg added: “We didn’t sign a single new guy in the winter, and that was reflected in Dynamo’s performances in the spring part of the season. At the same time, the club is getting the chance to pay closer attention to its own youngsters.”
UEFA did not impose any fines or transfer restrictions in addition to the exclusion, Dynamo said.
Dynamo are the only club to have been excluded from European competition this year after financial fair play investigations. Another 10 clubs, three of them Russian, accepted various UEFA sanctions last month.
Last year, Serbia’s Red Star Belgrade were excluded from the Champions League for breaking financial fair play and licensing rules.