Medina Spirit was stripped of the victory in last year's Kentucky Derby and Mandaloun was declared the winner after a ruling by state racing stewards on Monday.
The since-deceased Medina Spirit tested positive after the race last May for a steroid, betamethasone, that is legal in Kentucky but banned on race day.
Medina Spirit finished half a length ahead of Mandaloun in the race, giving trainer Bob Baffert what was then his seventh Kentucky Derby title. Baffert was subsequently banned for two years by Churchill Downs following the positive test.
Monday's decision by the Kentucky Horse Racing Commission makes Medina Spirit the second horse in the 146-year history of the race to be disqualified for a banned substance; the first was Dancer's Image in 1968, a decision that gave Forward Pass the victory. The only other disqualification was in 2019, when Maximum Security was penalized because of interference, giving Country House the win.
Following the announcement by the racing stewards, Churchill Downs issued a statement declaring Mandaloun the Kentucky Derby winner and congratulating owner and breeder Juddmonte Farms, trainer Brad Cox and jockey Florent Geroux. Cox becomes the first Louisville native to win the most famous race in the sport, and Mandaloun's owners will receive the $1.8 million winner's purse.
"We look forward to celebrating Mandaloun on a future date in a way that is fitting of this rare distinction,'' the statement said.
Bettors who backed Mandaloun to win in the pari-mutuel pool will not be refunded or paid, despite the disqualification of Medina Spirit.
Kentucky Horse Racing Commission regulations state that: "Payments of valid pari-mutuel tickets shall be made on the basis of the order of finish as declared 'official' by the stewards or judges. A subsequent change in the order of finish or award of purse money that may result from a subsequent ruling by the stewards, judges, or commission shall not affect the pari-mutuel payout."
Approximately $155.4 million was bet on the Kentucky Derby pari-mutuel pool. An estimated $11 million to $12 million was bet on Medina Spirit, based on his odds to win (12-1). An estimated $3 million to $4 million was staked on Mandaloun, who went off at 26-1.
Churchill Downs plans to replace Medina Spirit with Mandaloun on the paddock sign honoring the Derby winner on Tuesday. Mandaloun is set to run in the $20 million Saudi Cup in Riyadh, Saudi Arabia, on Saturday. The winner receives $10 million.
The racing commission also suspended Baffert for 90 days and fined him $7,500 on Monday. The decision followed a Feb. 14 hearing that was closed to the public and media.
Clark Brewster, an attorney for Baffert, said he would appeal the ruling.
"This ruling represents an egregious departure from both the facts and the law," Brewster said, "but the numerous public statements by KHRC officials over the last several months have made perfectly clear that Bob Baffert's fate was decided before we ever sat down for a hearing before the three stewards, one of whom is directly employed by Churchill Downs as the racing director at Turfway Park.''
The California Horse Racing Board said it will honor Baffert's suspension at its tracks. He is based at Santa Anita, where he has already won some of this season's 3-year-old prep races for the Kentucky Derby.
The CHRB also said it will honor any stay or preliminary injunction if granted by Kentucky racing officials or a court.
Medina Spirit collapsed and died on Dec. 6 of a heart attack following a training run at Santa Anita less than a month after finishing second in the Breeders' Cup Classic at Del Mar.
Baffert, a Hall of Fame trainer, initially denied wrongdoing after a postrace drug test revealed 21 picograms of betamethasone in the horse's system. Baffert later acknowledged treating the horse with a topical ointment containing the corticosteroid for a skin inflammation.
Churchill Downs subsequently suspended Baffert, citing a recent spate of failed drug tests by his horses. Baffert sued the racing commission last June, seeking custody of remnant samples of Medina Spirit's blood and urine for subsequent testing to prove that the steroid did not come from an injection.
Another Baffert attorney, Craig Robertson, said in December that a urine test from a split sample showed the steroid came from an ointment.
Animal Wellness Action executive director Marty Irby applauded the stewards in a statement for taking action against Baffert, whom he called "American horse racing's most infamous violator.''
"Baffert continues to drag horse racing through the mud in scandal after scandal,'' Irby said, "and we call on every racing jurisdiction in the nation to hold him accountable by reciprocating the Kentucky Horse Racing Commission's suspension in their own state. We're elated that Baffert won't be participating in the upcoming 2022 Kentucky Derby and believe the horses will be better off, and the event will have more credibility, without him.''
ESPN's David Purdum and The Associated Press contributed to this report.