Priestman, who has coached the team since 2020, and Canadian officials Joseph Lombardi and Jasmine Mander have been banned from any football-related activity for one year for "offensive behaviour and violation of the principles of fair play", FIFA said.
New Zealand complained that Canadian staff flew drones over their training sessions before their opening fixture at the Olympics, which the Canada won 2-1.
The incident caused Priestman and the other officials involved to be suspended by Canada Soccer, the sport's national governing body, and sent home from the Games.
There was no immediate comment from Canada Soccer or the Canadian Olympic Committee.
On Friday, former Canadian national team players Christine Sinclair and Stephanie Labbe said players had never been shown drone footage during their time on the team.
Canada are scheduled to play France on Sunday and take on Colombia on Wednesday. The top two teams in each group and the two best 3rd-ranked teams qualify for the Olympic quarter-finals.
