The term originates from the Yiddish word for a Jew and has been adopted by many Tottenham fans due to the large Jewish presence within their fanbase.
According to The FA, the word is seen as a "badge of honour" among many fans, especially those at White Hart Lane.
However, the organisation has warned that fans could face legal action if they are heard using it.
A statement on The FA's website read: "Although the term derives from the Yiddish word for a Jew, its use in the English language has been, both historically and in contemporary use, derogatory and offensive.
"In light of the historic and contemporary use of the term, The FA considers that the use of the term 'Yid' is likely to be considered offensive by the reasonable observer.
"Use of the term in a public setting could amount to a criminal offence, and leave those fans liable to prosecution and potentially a lengthy Football Banning Order."
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