Everton's punishment for breaching Premier League financial regulations has been reduced to a six-point deduction.

Earlier in the season, the Premier League ruled that Everton would be deducted 10 points for breaching the division's Profit and Sustainability Rules over a three-year-period.

Up until 2021-22, Everton's losses amounted to £124.5m, almost £20m more than the allowed £105m deficit, and was the most severe punishment in Premier League history.

However, Everton argued that unforeseen extra costs from building their new stadium contributed to the loss, as well as arguing that "they acted in the utmost good faith".

Furthermore, the Toffees had been in previous dialogue with the Premier League regarding the threat of going over the financial threshold in the preceding months, and expressed their shock at the severity of the punishment.

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Having immediately set about launching an appeal, Everton have been forced to wait over three months to establish whether the 10-point penalty, which put the club in a relegation scrap, would stand or be reduced.

On Monday, Everton learned that four points would be added back to their total, moving them five points clear of the bottom three, as well as a club statement revealing that it had been acknowledged that the view that they had not acted in the utmost good faith was inaccurate.

It read: "Everton can confirm an Appeal Board has concluded that the points deduction imposed by an independent Premier League Commission in November be reduced from 10 points to six points, with immediate effect.

"While the club is still digesting the Appeal Board's decision, we are satisfied our appeal has resulted in a reduction in the points sanction.

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"We understand the Appeal Board considered the 10-point deduction originally imposed to be inappropriate when assessed against the available benchmarks of which the club made the commission aware, including the position under the relevant EFL regulations, and the nine-point deduction that is imposed under the Premier League's own rules in the event of insolvency.

"The club is also particularly pleased with the Appeal Board's decision to overturn the original commission's finding that the club failed to act in utmost good faith. That decision, along with reducing the points deduction, was an incredibly important point of principle for the club on appeal. The club, therefore, feels vindicated in pursuing its appeal.

"Notwithstanding the Appeal Board's decision, and the positive outcome, the club remains fully committed to cooperating with the Premier League in respect of the ongoing proceedings brought for the accounting period ending in June 2023.

"The club is still considering the wider implications of the decision and will make no further comment at this time other than to place on record its thanks to our Fan Advisory Board and other fan groups throughout this process, and to all Evertonians for their ongoing support and patience."

Everton, along with Nottingham Forest, are still waiting to discover whether they will be handed points penalties for breaching Profit and Sustainability regulations for the period up to and including the end of 2022-23.