In a fierce wheel-to-wheel battle entering the corner, the two cars made contact, which resulted in a puncture for Alonso's front right tyre.
However, both drivers continued their fight into Turn 9, but Red Bull's Sergio Perez capitalised on their wide racing line, executing a double overtake to snatch third place.
While Alonso initially lost three positions, the puncture forced him back to the pits and ultimately forced him to retire from the race, while Sainz managed a fifth-place finish.
The stewards investigated the incident for a potential violation of Appendix L, Chapter IV, Article 2(d) of the International Sporting Code, which addresses conduct that is considered unsportsmanlike or potentially dangerous to other drivers.
After investigation, the FIA decided to hand Alonso a 10-second time penalty for causing a collision for his Sprint race incident with Sainz, as well as a three-point penalty to his FIA Super Licence.
A statement read: "The Stewards heard from the driver of Car 14 (Fernando Alonso), the driver of Car 55 (Carlos Sainz), team representatives and reviewed positioning/marshalling system data, video and in-car video evidence and determined that Car 14 caused a collision with Car 55 at Turn 9. The result of the collision was that Car 55 was damaged and that Car 14 had a puncture and retired before the end of the sprint session.
"As per the guidelines on driving standards, which was agreed with the teams, an
Infringement of this nature required that a baseline penalty of 10 seconds was to be added to the time of a car that caused a collision.
"Article 54.3 of the Sporting Regulations states if the 10 second penalty is imposed after the end of a sprint session, then 10 seconds will be added to the elapsed time of the driver concerned. We accordingly added 10 seconds to the elapsed time of Car 14."
Speaking after Saturday's Sprint, the Aston Martin driver told DAZN F1 Spain, "With Carlos we were running side-by-side on Turn 7, then on Turn 8 I tried to run on the outside and he didn’t leave me space for that.
"I opened the racing line. Then I tried to do the same as him on Turn 9. I opened the racing line on Turn 8 and he didn’t do that to me on Turn 9.
"I came off the worst as I had to retire, but I only lost two points so it doesn’t hurt that much. It was entertaining, so good from that side."