The Toffees have been handed the punishment for breaching the competition's profit and sustainability rules.
The club plummet to 19th in the table with a new total of four points but have announced their intention to appeal against the decision.
The Premier League had referred Everton to an independent commission earlier this year but did not reveal specific details about the alleged breach.
The Merseyside club posted a financial loss for the fifth year running in March.
Premier League teams are permitted to lose £105 million over a three-year period and Everton admitted to being in breach of the rules for the period ending 2021-22.
The Toffees say they are "both shocked and disappointed" by the biggest sporting sanction in the Premier League's history.
In a statement, Everton said: "The club does not recognise the finding that it failed to act with the utmost good faith and it does not understand this to have been an allegation made by the Premier League during the course of proceedings.
"Both the harshness and severity of the sanction imposed by the commission are neither a fair nor a reasonable reflection of the evidence submitted.
"The club will also monitor with great interest the decisions made in any other cases concerning the Premier League's profit and sustainability rules."
Everton are just the third club to be handed a points deduction in Premier League history, with both Middlesbrough and Portsmouth suffering relegation after penalties in 1997 and 2010 respectively.