Assistant coach Jasmine Mander and Joseph Lombardi, an unaccredited analyst with Canada Soccer, were also sent home on Wednesday after a drone was believed to have recorded New Zealand training sessions on two separate occasions.
On Saturday, FIFA published the outcome of disciplinary proceedings against the Canadian Soccer Association (CSA), Priestman, Lombardi and Mander, confirming that the trio have been suspended from taking part in any football-related activity for one year.
Additionally, Canada have been handed an automatic deduction of six points from their Olympic campaign and a fine of 200,000 CHF.
In a statement, FIFA said: "CSA was found responsible for failing to respect the applicable FIFA regulations in connection with its failure to ensure the compliance of its participating officials of the OFT with the prohibition on flying drones over any training sites.
"The officials were each found responsible for offensive behaviour and violation of the principles of fair play in connection with the CSA's Women's representative team's drones usage in the scope of the OFT.
"CSA and its officials have been notified of the terms of the FIFA Appeal Committee's decision today.
"In accordance with the relevant provisions of the FIFA Disciplinary Code (FDC), they have ten days in which to request a motivated decision, which, if requested, would subsequently be published on legal.fifa.com.
"The decision remains subject to a potential appeal before the Court of Arbitration for Sport."
After voluntarily withdrawing from coaching Canada's opening match against New Zealand, Priestman was suspended from her role after "additional information" came to the Canadian Olympic Committee's (COC) attention regarding previous drone use that took place prior to Paris 2024.
COC chief David Shoemaker also revealed on Friday that it was believed Priestman was "highly likely" to have been aware of the drone incident.
Assistant coach Andy Spence remains in charge of the Canada team, who steered the side to a 2-1 win against New Zealand on Thursday. They now face France in Group A on Sunday.
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