Fifa revealed the 30-year-old had tested positive for a metabolite of cocaine, and will now be banned from playing all forms of football for the next 12 months.
"Fernando Correa has been banned for 12 months from all friendly and competitive games with both his national side and his club," a Fifa spokesman stated.
Correa provided the positive test after Uruguay's 3-0 home loss to Venezuela in a World Cup qualifier on March 31.
Mallorca president Mateo Alemany admitted he was surprised by the severity of the punishment dished out to the former Atletico Madrid star.
"We expected a ban of six months," Alemany told Marca. "I think that Fifa's decision to ban him for a year is excessive."
Correa has decided not to appeal against the ban.
