Simoni failed a drug control test in April and was withdrawn from the Giro d'Italia before the start of stage 12 when the results were released.
But he was found to have the drug still in his system after test results came through following the ninth stage of the race at Caserte on 21 May.
Simoni was the defending champion and had claimed victory on stage 11 to climb to third overall.
He could be banned for anything from four years up to life.
But he could also face a prison sentence.
"I feel guilty by negligence, I have dirtied this sport that I love," said Simoni, who still hopes to race in the Tour de France.
The Saeco team will take stock before deciding on a further course of action.
"We have to clarify the situation," said the team's manager Claudio Corti.
Simoni tested positive for cocaine metabolites in a random test on the eve of the Giro del Trentino last month.
He blamed the result on an anaesthetic injection he had during dental treatment.
Dentist Bruno Grosselli confirmed in an Italian TV interview that he had treated Simoni hours before tests were carried out by the World Anti-doping Agency.
Police took away samples of the product from Grosselli's surgery as part of an investigation being run by the Trento district attorney Bruno Giardina.