The North Antrim MP will also be excluded from the House of Commons for 30 sitting days from 4th September following a major breach of parliamentary rules.
Electoral authorities in Northern Ireland are to begin drawing up measures which could see him face a by-election if enough constituents demand it.
He has vowed to fight for his seat if he faces the electorate over his failure to declare two luxury family holidays paid for by the Sri Lankan government.
In March 2014, the senior Democratic Unionist lobbied against a proposed United Nations resolution to investigate alleged human rights abuses during a civil war on the Indian Ocean island without citing his financial benefits.
If 10% of his constituents sign a petition, an election will be called.
Sir Kevin Barron MP, chairman of the Commons Committee on Standards, said: “We concluded that Mr Paisley had committed serious misconduct and that his actions were of a nature to bring the House of Commons into disrepute, which is a further breach of the code of conduct.
“Because we regard this as an especially serious case, we have recommended that Mr Paisley be suspended from the service of the House for a period of 30 sitting days, starting on the fourth of September.”
A DUP statement said it took the matter very seriously.
“The party officers have decided to suspend Mr Ian Paisley MP from membership of the party pending…
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