The word has often been deployed as a term of abuse against Jews but a section of Spurs' support has taken to using it in terrace chants.
North London club Tottenham have traditionally drawn a significant number of fans from the area's local Jewish community and this has led to anti-Semitic abuse from rival teams.
The OED, regarded as the leading dictionary of British English, has also added the closely related word "Yiddo" among a number of changes and new entries made in January.
The dictionary's publisher, the Oxford University Press (OUP), said in a statement issued Wednesday the word is labelled as "offensive and derogatory".
"As we state at the closely related word YID... Tottenham Hotspur Football Club is traditionally associated with the Jewish community in north and east London, and the term is sometimes used as a self-designation by some Tottenham fans," the OUP statement added.
"We will ensure the context for this connection is very clear in both definitions."
The words derive from the Yiddish term for Jew but are thought to have been taken up as an insult during the 20th Century.
Chants of "Yids", "Yid Army" and "yiddos" are frequently heard in the home stands at Tottenham games, with some Spurs fans justifying their use by saying they have "reclaimed" the words.
But other Tottenham supporters, in addition to Jewish groups, have said all football fans should not use terms of abuse, whatever their reasoning.
"As a club we have never accommodated the use of the 'Y word' on any club channels or in club stores and have always been clear that our fans (both Jewish and gentile) have never used the term with any intent to cause offence," a Tottenham spokesperson said Wednesday.
"We find the Oxford English Dictionary's definition of the word misleading given it fails to distinguish context and welcome their clarification."
Meanwhile, a spokesperson for the Community Security Trust, a charity working to protect British Jews from anti-Semitic attacks, said: "The OED have introduced several Jewish-related terms, so it is important that those which are anti-Semitic or otherwise offensive are clearly marked as such.
"Ultimately, it is some Spurs fans, not the OED, that have brought this racist term to wider public attention and potential use."
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