North Carolina will vacate all 16 football victories from the 2008 and 2009 seasons, and reduce scholarships as part of self-imposed penalties following an NCAA investigation into the program.
The school also put the football program on two years of probation as a result of the probe into athletes accepting improper benefits and academic misconduct.
In Monday's response to the NCAA's notice of allegations outlining nine violations, the school said it will cut three scholarships for each of the next three academic years.
The school will also pay a $50,000 fine, though it isn't imposing a postseason ban.
The response calls the punishments "difficult but necessary steps."
The school still must appear before the NCAA infractions committee on Oct. 28 and await word whether the university will face additional penalties from the NCAA.
Athletic director Dick Baddour is scheduled to hold a teleconference to discuss the university's response Monday afternoon.
Fourteen players missed at least one game and seven were forced to sit the entire season, with four of those either dismissed from the team or ruled permanently ineligible by the NCAA. The scandal that has hovered over the school for 14 months included an assistant coach receiving personal loans from an NFL agent, players receiving jewelry and other gifts from people outside the program, and a tutor providing improper help to players on term papers.
"We have acknowledged our violations and we've responded in the way you would expect of this university," chancellor Holden Thorp said in a statement. "We think that the sanctions we have proposed accept responsibility and, at the same time, give our current and future student-athletes and coaches every opportunity for success."
Thorp fired head coach Butch Davis a week before training camp, citing the cumulative damage to the university's reputation by the yearlong NCAA investigation. The Tar Heels went 8-5 under Davis in both 2008 and 2009, losing each time in the Meineke Bowl. Davis has never been tied directly to or cited for any violation in the probe.
John Blake resigned as associate head coach after last year's opening loss to LSU, during which the Tar Heels played without 13 players due to the NCAA probe. His close friendship with late NFL agent Gary Wichard became a focus of the investigation, including more than $31,000 in money transferred from Wichard to Blake that Blake's attorneys have characterized as loans from one friend to another during financial trouble.