However, team management decided against sending the 29-year-old all-rounder home after the incident on Friday night following their six-wicket defeat by New Zealand.
British newspapers had reported on Sunday that Flintoff was seen inebriated in the small hours. Reports said he had to be rescued from the sea after falling off a pedalo.
"I know that what I did on Friday night was completely wrong and I have to take full responsibility for it," Flintoff said in a statement.
"There can be no excuses on my part. I know I shouldn't have done what I did and I have to accept the punishment.
"To my team mates and the England supporters that I let down, all I can say is that I am extremely sorry and assure everyone that I will be giving 110 per cent for England for the rest of this tournament."
A statement from the England and Wales Cricket Board (ECB) said five other players had also been fined for breaching discipline.
It added that this was not the first time that Flintoff, considered one of the world's greatest all-rounders and a key figure in their famous 2005 Ashes win over Australia, had been involved in such an episode.
"Andrew Flintoff has been given warnings about his conduct and disciplined for previous incidents of this nature," England head coach Duncan Fletcher was quoted as saying in the statement.
"In light of this and due to the serious nature of the incident which he was involved in at the hotel on Friday night, we have decided to take further disciplinary action against him.
"Andrew has been made fully aware of the team management's concerns and the fact that the ECB considers this type of behaviour to be totally unacceptable.
"He will remain with the World Cup squad and be available for selection for our next match against Kenya."
The others disciplined were James Anderson, Ian Bell, Jon Lewis, Paul Nixon and Liam Plunkett, said the statement.
The ECB added that Flintoff would not be considered for the England captaincy should Michael Vaughan be injured at any stage during the tournament.
Flintoff is known as a big drinker but has shed weight and cut his drinking significantly in recent years.
However, he was famously hungover on the team's open-top bus as England celebrated their 2005 Ashes win through the streets of London.
Former England captain Nasser Hussain slammed Flintoff's behaviour.
"There is a history to this story. It is not the first time. In Australia he had three or four warnings about his drinking," Hussain said on Sky Sports while commentating at the ground.
"Is that the best preparation to go out drinking till 3 am in this heat? I say well done England finally for having strong management."
All-rounder Ravi Bopara replaced Flintoff in England's line-up in the 51-run win over Canada.
England play Kenya on Saturday, March 24 in their final group match.