Premier League clubs have agreed in principle to introduce new financial rules next season, voting on Thursday to go ahead with squad cost ratio rules to replace the current Profitability and Sustainability Rules (PSR), a source said.

Clubs will likely be limited to spending 85% of their revenue on transfers, wages and agents fees if the new rules are adopted at the Annual General Meeting in June.

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PSR will still be in place next season with a transition period in 2024-25, as will points deductions, which will also remain part of the new rules once adopted.

Everton were deducted 10 points in November, reduced to six on appeal, before they received a second deduction to take their points loss to eight for breaching PSR. Nottingham Forest, meanwhile, were deducted four points.

Everton and Forest are 16th and 17th in the table respectively, just above the relegation zone.

Although the season ends on May 19, the Premier League announced a backstop date of May 25 for all appeals to be concluded.

The agreement in principle comes after the Premier League decided at a shareholders' meeting last month that it was prioritising the development and implementation of a new League-wide financial system.

According to Premier League guidelines, clubs are at risk of breaching PSR if they incur more than 105 million ($131.90 million) in losses over three seasons, which amounts to 35M annually.

Last year, treble winners Manchester City were referred to an independent commission over more than 100 alleged breaches of finance rules, but no verdict has been reached in that case. City have denied any wrongdoing.

Championship leaders Leicester City, who were relegated from the top flight last season, could also face a points deduction after the Premier League referred them to an independent commission last month over alleged breaches in the league's spending rules.

In response, Leicester issued two legal proceedings against the Premier League and the English Football League (EFL).