European soccer’s governing body is preparing to impose sanctions on English champion Manchester City, one of the richest teams in the sport, after a two-month probe of the club’s finances.

UEFA investigators on Thursday referred the case to the judges of its Club Financial Control Body to decide how to punish City for breaching European soccer’s Financial Fair Play regulations, which are designed to curb the influence of superwealthy owners and prevent clubs from operating at too great a loss. UEFA, which has come down on...