FIFA has voted overwhelmingly in favour of tough new measures to counter racism and discrimination.
Serious incidents of racism could mean relegation or expulsion for the teams involved.
First or minor offences will result in either a warning, fine or order for a match to be played behind closed doors.
''What is reported in the media is actually less than 1% of the incidents that happen around the world,'' said anti-racism task force head Jeffrey Webb.
"We've got to take action so that when we look to the next 20 or 50 years this will be the defining time that we took action against racism and discrimination."
World football's governing body passed the resolution with a 99% majority at its congress in Mauritius.
"We need zero tolerance and strict punishments everywhere. We must lead. We must set a tough, uncompromising example,'' said FIFA president Sepp Blatter.
"We can make a difference. We can send a strong signal to the racists that their time is up."
FIFA commissioned a task force to address the issue of racism after a friendly game in January between AC Milan and Pro Patria was abandoned due to racist chanting.
The BBC reports FIFA's federations will also lose the power to impose their own judgements.