The NCAA placed the University Minnesota on probation for two years and banned the football team from appearing in a bowl game next season for 17 rules violations in football, basketball and wrestling.
Minnesota's basketball team was stripped of one scholarship next year, and the wrestling team lost its right to interact with a campus wrestling club.
The investigation was initiated soon after the school received three years' probation in 1988 for basketball and football violations that occurred in 1982-86.
"I'm embarrassed personally and I'm embarrassed for the institution," Athletic Director Rick Bay said. "I hope this is the last time we will all be meeting like this."
The most serious violations involved former Minnesota administrator Luther Darville, who gave athletes at least $19,000 in improper payments, the NCAA said. Darville was convicted of three counts of theft and served prison time.
The committee said Lou Holtz, who left Minnesota for Notre Dame in November of 1985, committed two rules violations while he was the Golden Gophers' football coach. Holtz gave $250 to an athlete to pay for a course that allowed the athlete to remain eligible for competition. Holtz also was found to have given between $25 and $40 to Roselle Richardson to reimburse the former quarterback for the loss of a wallet.
"I made two errors of judgment," Holtz said, adding that the payments were made for humanitarian reasons and not to gain a competitive advantage.
Holtz had been rumored to be on his way out at Notre Dame, especially if Minnesota had been penalized severely for his actions.
However, E. William Beauchamp, Notre Dame's vice president in charge of athletics, said Wednesday that he expected Holtz to remain at the school.