CBS has suspended star reporter Lara Logan and a producer for an erroneous 60 Minutes report about the attack on a US diplomatic post in Benghazi, Libya.
Logan and producer Max McClellan ran an interview with a security contractor who was later discredited by the FBI. Ms Logan later called it a "mistake".
CBS News Chairman Jeff Fager said: "This deception got through and it shouldn't have."
The network's internal review of the incident censured the report.
Its inquiry found the 60 Minutes team should have done a more thorough job vetting the information provided by security contractor Dylan Davies.
'We were wrong'
He initially reported that he had witnessed the 11 September 2012 attack, fought off an assailant, and later saw the body of US Ambassador Christopher Stevens.
But other news outlets later revealed that Mr Davies had told FBI investigators and his employers he was not at the Benghazi compound on the night of the attack.
The CBS News internal review also determined Ms Logan should not have done the story at all after making a speech in Chicago claiming it was untrue that the US military had suppressed al-Qaeda.
Logan, who faces a forced leave of absence of undetermined length, apologised for the incident soon after the report's initial 27 October airing.
"The most important thing to every person at 60 Minutes is the truth, and today the truth is we made a mistake," Logan told a CBS morning news programme on 8 November.
Publication of a book written by Mr Davies about the 2012 attack was also halted the same day.
Threshold Editions suspended publication of The Embassy House: The Explosive Eyewitness Account of the Libyan Embassy Siege by the Soldier Who Was There.
The book, written under the pseudonym Sgt Morgan Jones, was released on 29 October.
The attack against the US consulate - which resulted in the death of Mr Stevens, another state department worker, and two former Navy Seals - was originally said to have sprung out of protests against an anti-Islam film produced in the US.
It was later acknowledged by US officials to have been an organised, pre-planned assault by militia forces.
The US filed charges against a Libyan militia chief, Ahmed Abu Khattala, in August. An unknown number of other alleged attackers have also been charged.
Republicans denounced President Barack Obama's handling of the incident, accusing his administration among other things of downplaying the attack in order to protect his 2012 re-election campaign.
Logan, a high-profile correspondent who has long covered international conflict, was reportedly the victim of a sexual assault by a mob in Egypt's Tahrir Square in February 2011.