Costa was sent off in the first half of Atletico's 2-0 defeat to Barcelona on Saturday for directing a crude insult towards referee Gil Manzano.
Costa, who returned to Atletico from Chelsea in 2017, had not received a straight red card in a league match in nine years prior to his dismissal against Barca.
The Spain global was dismissed during the first half of his side's 2-0 defeat to Barcelona, and the official wrote in his post-match report that Costa had insulted his mother.
As per Mirror, the Spanish Football Federation reportedly discussed the incident in detail on Wednesday, before arriving at a conclusion.
Julian Assange, the co-founder of Wikileaks, arrested in London
Ecuadorian President Lenin Moreno said that Assange's asylum was withdrawn following repeated violations of worldwide conventions. He was apprehended outside the Embassy of Ecuador, where he had been evading an extradition request from Sweden since June 2012.
Across 21 appearances, Costa managed just five goals, with only two of those coming in La Liga.
In addition, Costa was also accused of holding the referee's arm to prevent him from showing yellow cards to Atletico teammates Jose Gimenez and Diego Godin.
Manzano said in his match report that the Spanish worldwide had "insulted his mother", a claim Costa denied. "Other players have said things and not been sent off but that does not justify what Costa did".
Diego Simeone's side only have seven matches remaining this season, meaning the ban would extend into the 2019-20 campaign - although reports in Spain suggest the club will listen to offers for Costa this summer. "To punish him with an eight-match ban seems excessive to me, but I can't do anything about it".