Trent Elkin, the Sharks' conditioning coach during the program in 2011 who now works at Parramatta, is also facing having his registration cancelled and advised he would be unlikely to be considered for employment in the game for at least two years.
NRL chief executive Dave Smith announced the proposed penalties at a press conference on Tuesday after a lengthy investigation from the game's integrity unit.
Smith stressed the investigation findings are provisional and all parties have the right to respond until January 15, but said the club was found to have "breached the NRL code of conduct through a serious failures to safeguard the health and welfare of its players".
An NRL statement read: "The National Rugby League has completed its review of governance issues at the Cronulla-Sutherland Sharks Football Club in 2010 and 2011 and the preliminary findings have identified serious failures on the part of the club and certain individuals who had a responsibility to safeguard the health and welfare of its players.
"Dave Smith announced today the preliminary findings are that the club breached the NRL code of conduct in several respects and that head coach Shane Flanagan and the then head of strength and conditioning Trent Elkin were responsible for a number of the failings leading to those contraventions.
" In relation to Mr Flanagan: It is proposed that his NRL registration be suspended for 12 months.
"In relation to Mr Elkin: It is proposed that his NRL registration be cancelled."
In listing its preliminary findings, the NRL alleged that Cronulla exposed players to significant potential health risks and to possible breaches of the NRL Anti-Doping Rules.
Earlier this year the Sharks found themselves under investigation by the Australian Sports Anti-Doping Authority (ASADA), with widespread reports suggesting as many as 14 Cronulla players had been looked into regarding the taking of banned substances.
Smith said on Tuesday that the ASADA's investigation is still ongoing.
Responding to the NRL's proposed sanctions, the Sharks said it was their intention to "vigorously defend the charges" and also gave their support to Flanagan.
In a statement on www.sharks.com.au, the club said: "The Cronulla Sharks acknowledge the breach notice handed down by the NRL in relation to code of conduct issues back in 2011.
"We have been supportive of the NRL throughout the process and the club will now consider the provisional findings, which are detailed and cover a number of aspects. We appreciate and understand the seriousness of the situation and appropriately we will take time to work through a response prior to January 15. However it should be noted that it is our intention to vigorously defend the charges.
"The club will also support coach Shane Flanagan regarding the provisional findings against him."