The duo denied wrongdoing and claimed they had a verbal agreement over the money following Platini's work as Blatter's technical adviser between 1998 and 2002.
In a statement, FIFA said: "The proceedings against Mr Blatter primarily related to a payment of CHF 2,000,000 (£1.34m) transferred in February 2011 from FIFA to Mr Platini.
"Mr Blatter, in his position as President of FIFA, authorised the payment to Mr Platini which had no legal basis in the written agreement signed between both officials on 25 August 1999.
Blatter has also been fined £33,700 while Platini has to cough up £54,000.
The decision is effective immediately following an ethics investigation but both men are expected to appeal.
Blatter is due to address a press conference at 10am.
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