He has also been ordered to pay part of the costs of the hearing and has 14 days in which to lodge an appeal. No figure has been put on the costs, which could exceed pounds 1m.
An appeal is Graham's most likely next step and he could take the matter to the High Court. "They are giving me no option but to appeal," he said. "I will sit down with my solicitors to decide whether that will be to a higher FA board or in the High Court for the right to pursue my trade."
Graham's plea for leniency was taken into account by the FA commission, but he said: "In reality, because I've been kept out of work for five months already, this is an 18-month ban.
"But the hidden damage in this sentence is financial and it is excessive. Compare this to what has happened to big clubs found guilty of serious financial irregularities and tell me whether this punishment is fair and reasonable."
Graham claimed that he was a scapegoat. "They are using me as the whipping boy. What has happened to the rest of the Premier League inquiry while I've been almost destroyed?"
The FA expect Fifa, the game's world governing body, to endorse Graham's suspension and to enforce it worldwide.
The chairman of the League Managers' Association, Howard Wilkinson, said most managers would think the punishment extremely harsh.
Wilkinson, the Leeds United manager, said: "Loss of his job at Arsenal, heavy defence costs and six months out of work have probably cost George pounds 1.5m already. The price he has already paid, plus perhaps an appropriate fine, should have been sufficient both as a punishment and a deterrent."
Arsenal's Swedish midfielder Stefan Schwarz has signed for the Italian club Fiorentina for a fee of around pounds 2.7m. Schwarz joined Arsenal for pounds 1.75m after last year's World Cup. He had been linked with a move to Italy for several weeks after he suggested that his family had not settled in London
Graham profile, page 17