Sebastian Vettel has been demoted 10 grid places for next weekend's Malaysian Grand Prix after his crash with Robert Kubica in Melbourne.
Vettel and the BMW Sauber driver had to retire from the Australian Grand Prix following the collision with three laps left as they battled for second place.
Stewards also fined his Red Bull team £35,000 for telling him to continue.
Vettel looked set for a podium finish, but the grid penalty will now severely handicap the German in Malaysia.
The 21-year-old, who came to prominence after winning the Italian Grand Prix at Monza last year, tracked eventual race winner - Brawn GP's Jenson Button - right from the start on Sunday.
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But, with only three laps remaining, the Red Bull driver was slow through the first two corners, allowing Kubica to get alongside on the outside on Turn Three.
In the key part of the incident, which stewards deemed to be the German's fault, the Red Bull's front wheel tagged the rear wheel of the BMW after the Pole had given Vettel room.
The result was that both cars tipped into a spin, damaging their front wings before they each crashed further around the lap.
And Vettel continued on the track with one front wheel hanging off his car in a doomed attempt to stay in the race, earning Red Bull a fine in the process.
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