It means Vettel drops from third to fifth in the final classification, with Ricciardo moving up to third and Red Bull team mate Max Verstappen - who earlier had five seconds added to his race time for going off track and gaining an advantage whilst battling the four-time champion - to fourth.
In making their decision, the stewards referred to the race director Charlie Whiting’s recent directive in the United States, which stipulated that any change of direction under braking which results in another driver having to take evasive action will be considered abnormal and hence potentially dangerous to other drivers.
According to the stewards report telemetry and video evidence showed that Vettel did change direction under braking for Turn 4 and that “this was considered to be potentially dangerous in view of the proximity of the wheels of each car.”
In addition to a 10-second penalty, Vettel was also handed two penalty points on his license, bringing his total to six points in the last 12 months.
Ferrari boss Maurizio Arrivabene said 'bureaucracy' had robbed his team of a podium, adding that the decision was "too harsh and somehow unfair."
Speaking about the incident with Ricciardo after the race, Vettel indicated he thought his driving was within acceptable bounderies: “I didn’t get the best exit [out of Turn 3] so I knew it would be tight with Daniel, and I know Daniel in these situations: he’s jumping into the gap even if he doesn’t make the rest of the corner.
“I think I knew exactly the situation - or in my head - the situation in Barcelona came up where he dived down the inside last minute. I gave him enough room but in fact he didn’t make the first corner.
“He was obviously upset about it and he told me to look at it again. I will do that but yeah, I think I gave him just enough room, it was very late. I think both of us just about made the corner.”
However, Ricciardo said that Vettel’s move was “what everyone's been complaining about lately”.
“It looked like he opened the door, I committed and had every right to be there, but he kept closing the door and in the end I had nowhere to go,” the Australian explained.
"Don't get me wrong I love racing, I love racing hard and even a bit of contact, but this whole moving under braking - you don't move after you've been out-foxed.”
Ricciardo’s promotion to third assures the Red Bull driver of third place in the drivers’ standings this season, which equals his best championship position to date.