Scottish police said they had attended a “gathering at a property” in Glasgow in the early hours of Sunday and had issued fines to 10 people.
The Scottish Premiership leaders issued a statement saying they were aware of an alleged incident and had launched an internal investigation.
Speaking to Rangers TV, Gerrard named the five players who had broken the rules.
“First and foremost we have to acknowledge that five of our players have been involved in a breach of Covid regulations which from the top of the club to the bottom we are all really disappointed in,” he said. “That will be dealt with internally.”
He said the players — Bongani Zungu, Nathan Patterson, Calvin Bassey, Dapo Mebude and Brian Kinnear — would be fined and were currently isolating in line with Covid-19 protocols.
Gerrard, whose team travel to face Antwerp in the first leg of their last-32 tie in the Europa League on Thursday, said he felt “personally let down” but wanted to focus on upcoming matches.
“We will certainly move forward from it,” said the Rangers boss, whose team are 18 points clear at the top of the Scottish Premiership.
“We are at a real critical stage in terms of the games coming up and where we are as a club.”
The incident comes three months after Jordan Jones and George Edmundson were handed suspensions for attending a house party. They are now both out on loan.
Scotland’s First Minister Nicola Sturgeon earlier this week called on football to “make sure your house is in order”.
She has previously criticised Celtic’s mid-season training camp in Dubai, which resulted in 13 players having to self-isolate on their return to Glasgow due to one positive coronavirus case.
Scotland remains under strict lockdown restrictions to help curb the spread of Covid-19, with no indoor mixing of households allowed.
