The Big 12 says it will withhold 25 percent of Baylor's share of conference revenue until an outside review of the athletic department determines whether the school is in compliance with conference regulations and Title IX guidelines.
Wednesday's action follows Baylor's sexual assault scandal that has rocked the school.
The sanctions against Baylor are the first by the Big 12 since the school and athletic department were hit by allegations of mishandling assault cases.
Baylor fired coach Art Briles last year and parted ways with university President Ken Starr and athletic director Ian McCaw after an investigation by a law firm found allegations of sexual assault brought to the school were not dealt with appropriately.
The Big 12 paid out about $30 million to each conference member last year.
The conference board released a statement that read in part:
"The Board is unified in establishing a process to verify that proper institutional controls are in place and sustainable," said Big 12 Conference Board of Directors chairman David Boren.
The statement added, "Baylor was not included in the Board vote and will be responsible for all associated costs."
Baylor Interim President David Garland responded to the Big 12's action with a statement that read, in part:
“This third-party review at the request of the Big 12 Conference will provide an opportunity for us to demonstrate our progress to date and our ongoing commitment in establishing Baylor as a leading institution in athletics compliance and governance and for preventing and addressing sexual assaults on college campuses.”
The statement added under new leadership, "the university has demonstrated a firm commitment to athletics compliance and integrity, increased awareness and prevention of sexual assault, implementation of Title IX best practices and providing comprehensive support services for any student in need of them."