The League will impose economic and political sanctions on Assad's government and has appealed to member states to withdraw their ambassadors from Damascus, said Qatar's Prime Minister Sheikh Hamad bin Jassim al-Thani. It will also call a meeting of Syrian opposition parties, he said.
"We were criticised for taking a long time but this was out of our concern for Syria," Sheikh Hamad told reporters in Cairo. "We needed to have a majority to approve those decisions."
Hopes among Western powers that Assad would be isolated by his Arab neighbors were repeatedly dashed until now.
Some Arab leaders have been reluctant to turn against one of their peers given the message it might send to their own restive populations, diplomats say.
But Assad has pressed ahead with the crackdown on protesters against his rule despite an Arab peace plan brokered on November 2. The United Nations says more than 3,500 people have been killed in seven months of violence.
(Read: Cairo meeting: Syria regime ‘fully accepts’ Arab peace plan)
"We are calling all Syrian opposition parties to a meeting at the Arab League headquarters to agree a unified vision for the transitional period," said Sheikh Hamad, who is also Qatar's foreign minister.
He said the suspension of Syria from the regional body would take effect on November 16, but did not detail the sanctions.
Qatar currently chairs the Cairo-based Arab League.
"We ask the Arab Syrian Army to not be involved in the violent actions and killing of civilians," Sheikh Hamad said, quoting from an Arab League statement.
Syria's representative to the Arab League said suspending Damascus violated the organisation's charter and showed it was "serving a Western and American agenda."
Youssef Ahmed told Syrian state television the move to suspend Syria could only be taken by consensus at a summit meeting of Arab leaders.
Echoes of Libya
Yemen and Lebanon opposed the suspension and Iraq abstained in the vote, Sheikh Hamad said.
Freezing Syria out of the 22-member League of Arab States carries extra symbolism in wake of events in Libya, where Muammar Qaddafi was ousted and killed in a rebellion that benefited from NATO air support.
The NATO mission got United Nations Security Council approval after Libya was suspended by the Arab League.
"This step introduces a possibility of foreign intervention and opens the door for engaging the international community in the case and reminds us of what happened with Libya," said Nabil Abdel Fattah, a political analyst at the Al-Ahram Center for Political and Strategic Studies in Cairo.
Sheikh Hamad held out the possibility that the League may ask the United Nations to help protect the rights of Syrians.
"If the violence and killing doesn't stop, the Secretary General will call on international organizations dealing with human rights, including the United Nations," he said.
Since the Arab peace deal, Syrian security forces have killed more than 100 people in Homs, Human Rights Watch said on Friday, and indignation at perceived dithering by Syria's neighbors has grown.
As Arab foreign ministers gathered in Cairo ahead of the announcement, some 100 protesters shouted "Bashar goes out, Syria is free" and waved flags and banners reading: "The people want international protection."
"Today's Arab League meeting saw developments, but it came after a long time, after eight months of killing," said Ibrahim Alshatay, a 35-year-old Syrian activist. "We hope today's decisions will end the violence immediately and no more men, women or children will die in Syria."
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@It Is Economy Stupid: @anybodyagree: You wouldn't be saying that if you or your loved ones were being gunned down for protesting peacefully. Close to 3,000 civilians have died in 8-9 months and yet your myopic vision cannot look beyond the religion of the oppressor and the oppressed.
IRAQ . .AFGHANISTAN . . LIBYA . . . now SYRIA. . .!!! Why We Muslim don't understand our common ENEMY . . .????
It as an exercise to garner public support for NATO mission in Syria.