Football Federation Australia has banned Perth Glory from competing in the A-League finals series after the club was found to have committed the largest breach of the salary cap in the competition's history.

The FFA determined Perth Glory systematically cheated the A-League salary cap for up to three seasons and will ensure the club finishes in seventh place on the A-League ladder after the 27 rounds are completed. Having led the league for most of the season, Perth's hopes of a first A-League title were dashed after the FFA determined they "deliberately, significantly and persistently" failed to report player payments and benefits to the governing body.

The Glory were found to have breached this season's $2.55 million salary cap by $400,000, having concealed or deliberately failed to report payments and benefits for six players. The club was also fined $269,000 in conjunction with being ruled out of the finals. Fairfax Media broke the story about Perth's salary cap allegations in December, prompting the investigation into the club's finances.

"We're in an environment where having an even playing field is important to the entertainment we can provide and the commitment people can make to their club," FFA chief executive David Gallop said on Friday. "So, penalties like this are a way of demonstrating to everyone that we are serious about fair play and unfortunately we are dealing with something that is unfair in this situation."