The ATP said Kyrgios was sanctioned for "conduct contrary to the integrity of the game" following an investigation into his behavior during a second-round loss to German qualifier Mischa Zverev last week at the Shanghai Masters.
Kyrgios gave little effort during the 6-3, 6-1 defeat, patting easy serves over the net and turning away before his opponent's serve had crossed the net.
The 21-year-old Australian had already been fined a total of $16,500 for failing to give a full effort, unsportsmanlike conduct and verbal abuse of a spectator.
The ATP said Monday that, in addition to the extra $25,000 fine, Kyrgios was handed an eight-week suspension lasting through Jan. 15 -- a day before the start of the Australian Open, the first Grand Slam tournament of 2017.
However, the tour said the suspension will be reduced to three weeks if Kyrgios agrees to enter "a plan of care under the direction of a sports psychologist or an equivalent plan approved by the ATP." That means he would eligible to return Nov. 7.
There are no regular tournaments on the schedule after Nov. 7. The only event in November is the ATP Finals in London from Nov. 13-20. The 12th-ranked Kyrgios has not qualified for the eight-player finals, so he will have to wait until next year in any case to return to the tour.
Kyrgios issued a statement Monday offering another apology for his conduct in Shanghai and saying he will be back in 2017. He did not say whether he would enter the treatment program mandated by the ATP.
"I regret that my year is ending this way and that I will not have a chance to continue chasing the ATP finals," Kyrgios said. "This was an important goal for me. I do understand and respect the decision by the ATP and I will use this time off to improve on and off the court. I am truly sorry and look forward to returning in 2017."
Kyrgios' outburst in Shanghai came only days after he had won his third title of the season in Tokyo.
During the match, Kyrgios was cautioned by the chair umpire about his conduct as a professional and booed and jeered by the crowd. Her responded angrily to the taunt of a fan by shouting, "You want to come here and play?"
In a postmatch interview, Kyrgios said he didn't care about the crowd reaction because he didn't owe them anything. It was a day after his opening win, when he said he was tired and bored and didn't really get time to savor his title-winning run in Tokyo.
After the loss, Kyrgios posted an apology of sorts on Twitter: "Not good enough today on many levels, I'm better than that. I can go on about excuses but there are none. Sorry #StillAWorkInProgress."
In the statement issued on his website Monday, Kyrgios offered further contrition.
"The season has been a long one as I battled several injuries and other challenges towards the end of the summer," he said. "The Asian circuit was particularly tough after the long week and win in Tokyo and with the travel throughout the continent, my body finally just gave out in Shanghai both physically and mentally.
"This is no excuse, and I know very well that I need to apologize to the fans in Shanghai and in other parts of the world. ... I of course know how important the fans are to the success of our sport and I personally love the interaction with fans in the many different cities throughout the world on the tennis circuit."
Kyrgios was a minus-600 favorite against Zverev and attracted the vast majority of the bets on the match at William Hill's sportsbook.
"There was nothing untoward betting-wise, just simply Nick letting his own head get the better of him again," William Hill spokesperson Jon Ivan-Duke told ESPN in an email. "Actually 96 percent of the bets were on Kyrgios, so I can't imagine the punters are all too pleased with his antics."
This isn't the first time that Kyrgios has run into trouble with tennis authorities. Last year, he insulted Stan Wawrinka with crude remarks during a match in Montreal. He received $12,500 in fines, as well as a suspended 28-day ban and a potential further $25,000 fine if he picked up any other major offenses over the following six months. His probation for that ended in February.
Kyrgios attracted criticism for his performances at Wimbledon and the US Open, for deciding not to play at the Olympics because of a spat with an Australian team official, and for firing back at retired players who have offered advice.
ESPN staff writer David Purdum and The Associated Press contributed to this report.