Manchester City's directors should step down after an independent commission found the Premier League club guilty of serious financial breaches, said former chairman David Bernstein, who described the situation as "beyond awful".

On Tuesday, the Premier League said City had used "sham" commercial contracts as part of schemes to inflate revenue and understate costs by more than £900 million ($1.19 billion) over nearly a decade.

The club, which denies wrongdoing, said in a statement it would appeal the ruling.

"I can't think of a penalty strong enough for this, really. I mean, this is absolutely terrible. I want to raise another question, and that is the position of the board of directors," Bernstein told talkSPORT after the announcement.

"Because the directors of the club, including the chief executive, who's been there for years and went through this through this period, are responsible for the running of the club in every respect.

"And again, if this was a public company of some sort, I think the directors with something as serious as this, would have to stand down or be suspended pending the outcome of all this ... appeal or no appeal.

"I don't think the present management can credibly continue."

City did not immediately respond to a request for comment outside regular business hours.

No sanction has yet been imposed on City, who have until Friday to lodge an appeal. The punishment could range from fines and a points deduction to relegation, but the saga could last for several more months.

"If it drags on for a year or two, heaven forbid, that would be the worst thing for everybody," said Bernstein, a lifelong City fan who was chairman from 1998 to 2003 and oversaw their return to the Premier League from the third tier of English football.

"... all I would say is that money (a fine) is not sufficient now.

"If these charges stand now and let's say the appeal does not happen or fails, then I'm afraid for the club I love, that they've got to come out of the Premier League. This is beyond awful."