Nitschke, who has campaigned on assisted suicide issues for more than a decade, was banned in a late night sitting of the board on Wednesday.
The ruling -- an interim measure pending the outcome of an inquiry -- follows the suicide of Perth man Nigel Brayley who died in May after communicating with Nitschke.
Nitschke was accused of moving into uncharted territory by supporting the 45-year-old despite knowing he was not terminally ill.
Brayley died after taking euthanasia drug Nembutal, which he illegally imported.
His life reportedly became very difficult after the death of his wife, Lina, who died after she fell from the top of a quarry while taking photographs in 2001.
The medical board said Nitschke, the founder of euthanasia group Exit International, had a duty of care to recommend psychiatric help for Brayley.
Its ruling, which prevents him from practicing medicine, was made under a section of the law that "enables the board to limit a practitioner's registration in some way to keep the public safe".
"The Medical Board of Australia is focused on public safety and managing risk to patients," it said.
Nitschke described the suspension as a "politically motivated deregistration" and told the Australian Broadcasting Corporation it was "clearly stupid" to claim he was a risk to public safety.
"That's about the most ludicrous thing they've said, that ... telling me I'm no longer a practicing doctor is going to somehow or other change things," he said, having previously defended Brayley's death as "a clear case of rational suicide".
"I mean, we've still got workshops, we've got heavily booked workshops all over Australia now. People will be coming in their hundreds -- I would estimate thousands now -- wanting to know how they can end their lives should they get to that point.
"Whether they remove my medical licence or not is not likely to change that one bit, and the idea there'll be more people somehow or other being influenced to end their lives I think is quite stupid."
Assisted suicide, or euthanasia, is illegal in most countries around the world and is banned in Australia, although it was legal for a time in the Northern Territory before the law was overturned in the 1990s.
When it was legal in the Northern Territory, Nitschke became the first doctor in the world to administer a legal, voluntary, lethal injection to end a life, and he went on to do the same for three other people.