General secretary Gianni Infantino outlined UEFA's plans at the SoccerEx conference in Manchester.
Infantino revealed the first sanction for a racist offence by supporters will be the partial closure of the stadium where the offence took place.
A second offence would then lead to a full closure of the stadium and a minimum fine of 50,000 euros (around £42,756).
The sanctions will affect all matches in European competition and will be voted through next month before coming into force from next season.
Infantino said: "What we are proposing is that if a player or an official commits a racist offence then he has to be suspended for 10 matches - at least - or a corresponding period.
"If supporters of a club are found guilty of racist abuse then the first sanction will not be a fine anymore. The first sanction will be a partial closure of the stadium.
"The part of the stadium where the racist abuse has taken place will be closed.
"At the second offence there will be a full closure of the stadium and a fine of a minimum 50,000 euros
"In addition to all of this we will encourage our referees through a three step process to stop games, to interrupt games and even abandon games."
The debate on racism has intensified in recent months after AC Milan midfielder Kevin-Prince Boateng led his team off the pitch after being abused during a friendly match against Pro Patria in January.
Infantino feels a zero-tolerance approach will make UEFA's stance on racism clear, adding: "The message will be that we don't accept and we don't tolerate racism and we don't treat racist offences like any other disciplinary case.
"Racism offences, sadly, still exist and have to be treated with full implementation of the zero tolerance policy and everyone has to be aware of it. Everybody has to be aware of the consequences of it.
"Again, when it comes to racism it's not only about sanctioning, it will also be about creating the awareness, speaking about it, kicking it out, educating players, educating fans, educating officials. Everyone has to be aware that there is no place for racism in football."
UEFA have been criticised by some for not taking a firm enough stance over racism in the past but Infantino has defended the governing body, citing the two-game supporter ban given to Lazio as an example of it cracking down on the issue.
He said: "I think that if there is an association who cannot be criticised for not having done enough on racism it's probably UEFA.
"In the last 10 years we've had over 120 cases. Our bodies then apply the sanctions in accordance with the regulations that they have. Per year we have over 1,000 disciplinary cases in general and racism has been treated very, very seriously from the outset.
"Just recently a club of Rome, Lazio, was punished with a two-match suspension. In the Europa League quarter-finals, two very important matches will be played without spectators. It's not really what I call taking it easy and I think our disciplinary board deserve to be respected for the decisions that they take."