USC also will reduce by one the number of coaches permitted to recruit off-campus next summer and will shave 20 days off its total recruiting activities for the next academic year.
With Mayo playing spectacularly at times, the Trojans were 21-12 in 2007-08, losing to Kansas State in the first round of the NCAA tournament.
Not only will those wins be stricken from the record books, the school said it will return an undisclosed amount of money received from the NCAA tournament that season.
"We believe the self-imposed sanctions are consistent with penalties imposed at other NCAA institutions which have been cited with similar rules infractions," Garrett said.
Pac-10 Commissioner Larry Scott said in a statement that USC's decision to self-impose "aggressive penalties" was "clear recognition of how seriously the University takes this matter and the sincere commitment . . . to set the program on a track to maintain the highest standards expected of every institution in the Pac-10 and the NCAA."
A month ago, the postseason ban might have seemed irrelevant for a team picked to finish near the bottom of the Pac-10. But the surprising Trojans, with a record of 10-4, were entertaining thoughts of the NCAA tournament in March.
"The best way for our players to look at it is we have practice tomorrow at 2 o'clock and we have a job to do and we're going to do it," O'Neill said.
Times staff writers Gary Klein and Lance Pugmire contributed to this report.