Cameron Smith's quest to win the FedEx St Jude Championship and become world No. 1 suffered a major blow before he teed off in the final round.

Smith seemingly carded a third-round 67 at TPC Southwind to fall two shots behind leader JJ Spaun but was handed a two-shot penalty on Sunday

Footage posted on social media showed Smith's ball was on the red line marking the penalty area on the par three after it fell.

The PGA Tour read: “Prior to the start of the final round of the FedEx St Jude Championship,  Smith was assessed a two-stroke penalty for breaching Rule 14.7

"Cameron Smith's score has been adjusted and the final round will start at 201 (-9). Final round pairings will not be adjusted."

Smith, who won the Players Championship and his first major title at the 150th Open at St Andrews in March, will replace Scottie Scheffler at the top of the world rankings

will replace Scottie Scheffler at the top of the world rankings if he can overcome a four-shot deficit to win in Memphis.

PGA Tour umpire Gary Young said officials initially had "such a quick look" at Smith's drop that they believed it was "basic" and the Australian was satisfied