This decision was taken yesterday at an emergency meeting in Oxford where chairmen of Football League clubs voted to ratify the controversial proposal.
Its primary aim is to prevent a situation as happened at Leicester City FC from repeating itself.
Leicester City went into administration last year and used this process to wipe out all its debts before winning promotion to the Premier League without losing any of its top players.
League chairman Sir Brian Mawhinney announced the decision, saying: ‘This is necessary because the Football League is the guardian of competitiveness in our divisions and we can’t have clubs who go into administration gaining an advantage.
‘It is a fundamentally different approach and there was a healthy debate – but I pay tribute to the clubs for attaching that significance to it.’
Clubs hit with the points deduction will have the right to appeal to an independent body.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children