The high-priced severance packages totalled $3.1 million for six employees.
Education Minister Line Beauchamp said the Montreal university displayed a lack of rigour and had to face the consequences.
''I mentioned several times that I was concerned about the slew of departures from Concordia and their budgetary impact,'' Beauchamp said in a statement Friday.
In a subsequent interview with The Canadian Press, she said universities need to get the message they can't just spend willy-nilly.
''What we're telling universities is this: 'You're managing money that comes mainly from taxes. You can't run it just like any other business.'
''Universities are autonomous, I agree, but there is a responsibility in managing public funds.''
Concordia issued a statement acknowledging Beauchamp's move.
''We understand and share her concerns,'' said president and vice-chancellor Frederick Lowy.
Lowy said an independent audit firm will launch a review of human resources processes for senior management.
''We will not hesitate to implement any changes resulting from this review that improve our human resources practices for senior management.''
The fine comes amid an increasingly bitter strike by thousands of college and university students against proposed tuition hikes.
Given the budgetary challenges faced by universities, many Concordia students expressed outrage when news of the expensive payoffs broke over the last few years.
Concordia is one of Montreal's two English-language universities.