The Ducks football program loses one scholarship per year for three years and was placed on probation for the same period after the NCAA's Division I Infractions Committee found that Kelly and the university failed to monitor the program, according to a report released Wednesday.
In addition, Oregon's official paid recruit visits were reduced from 56 to 37 for the next three academic years; its evaluation days were cut for each of the next three seasons; and it is not allowed to use recruiting services while on probation.
Kelly also received an 18-month show-cause order, meaning schools wishing to hire him would first have to appear before the infractions committee to determine if they should be subject to the show-cause procedures.
A 2010 payment of $25,000 to Willie Lyles and his recruiting service sparked the investigation into Oregon's recruiting processes, since Lyles had a connection with a Ducks recruit.
The infractions committee said Lyles provided cash and free lodging to a prospect and also made impermissible calls and off-campus contact with prospects, their families and coaches. In addition, Oregon's staff members exceeded coaching limits in their recruiting activity.
Kelly was unaware of Lyles' involvement, the report said, but should have ensured that his staff complied with the rules.