City were formally charged by the Premier League this week, following a four-year investigation into their financial dealings.
The allegations cover the period between the 2009/10 and 2017/18 seasons, in which City won several trophies including 3 Premier League titles.
The club continue to deny the breaches and have until October 2nd to appeal the charges which could see them stripped of their Premier League titles and kicked from the Premier League.
Findings revealed that the alleged financial manipulation exceeded £900M across the period examined, putting the club at serious risk of being punished severely.
Speaking on the situation, Carragher stated that City's owners are unlikley to continue in English football as their reputation is tarnished.
"I do think Manchester City’s titles they’ve won in this time, or trophies, should be taken off their list. Whether other clubs should get them is slightly different. But what Man City have done is, they’ve not just hurt their own players in terms of no one looks at their trophies and medals now in the same way."
He continued: "Those players will never get that feeling and it was robbed by Manchester City. That’s what they haven’t got. I don’t think any player will care if you go and give them a medal, and he puts it in the house, in his trophy room, he’ll never look at it. It’s not about medals, it’s about feelings, and that’s what Manchester City have robbed.
"You’ve got supporters, players, the club and owners. For me this is all about the owners, the people who are at the top of the club.
"Man City are a wonderful club and have been for a hundred years and will be for hundreds of years going forward. But in terms of what we’re finding out now, I don’t know how the owners can continue in English football."
Club executives plan to launch a formal appeal against the independent commission's verdict, an appeal that must come over the next few days as the drama continues.