The club announced that Simpson would be stood down from senior selection for the time being but will be available to play for Peel Thunder in the WAFL, after the 20-year-old caused a stir last Thursday when he elected not to fly to Sydney as the Dockers' travelling emergency.
Simpson had been told by Fremantle not to train this week while discussions about his immediate future were held.
Fremantle's football operations manager Chris Bond outlined the result of Simpson's sanctions in a club statement on Thursday.
"Josh is away from the club at our direction at present and will remain so until next Tuesday," Bond said.
"He is able to return to training at that time and will be available to be selected to play for Peel from next weekend.
"Under the terms of his contract and the AFL's Player Contract Bargaining Agreement, Josh will also be fined an undisclosed sum for the second time in four months for not meeting club requirements."
Bond also revealed that Simpson would have to train diligently over a lengthy period before he is considered for senior selection again.
"(Selection) will be determined by his ability to demonstrate the behaviour required of a player at this club for a sustained period of time," Bond said.
"We will continue to provide every resource necessary to ensure that Josh continues to develop both personally and professionally, so he is best placed to meet the challenges he faces in becoming an elite player in the AFL."
A contrite Simpson released a statement through his management group in response to the club sanctions.
"I have had a lot of time to think about my actions and the consequences this may have had on my career," he said.
"I am motivated to be an AFL player and with the continued support of the football club I will make the most of this opportunity given to me."
Meanwhile, coach Ross Lyon has urged Chris Mayne to regain his magic touch as the Dockers attempt to plug significant holes in their forward line.
Fremantle have been robbed of their two best small forwards following a serious ankle injury to Michael Walters and Hayden Ballantyne's one-match suspension.
Mayne, a medium-sized forward and a revelation last year with 37 goals, has managed just one goal this season.
The 25-year-old returned from an ankle injury in last week's loss to the Swans, and his quiet performance didn't go unnoticed by Lyon.
"I wouldn't have thought he was underdone - he just didn't deliver," Lyon said ahead of Friday night's clash with North Melbourne at Patersons Stadium.
"Obviously coming off that injury, there was a bit of conjecture as to what it was.
"But I think it was an ankle in the end. He just needs to get going and deliver."
Four Fremantle players have copped suspensions this season, forcing Lyon to address the group about their discipline.
"I've clearly made mention of it publicly and privately," Lyon said.
