Francois Etoundi, 29, who took bronze in the 77kg category, was detained by police yesterday morning following a disturbance at the village in Dalmarnock in Glasgow's east end.
He is due to appear at Glasgow Sheriff Court today.
Steve Moneghetti, Team Australia Chef de Mission, said that the Commonwealth Games Federation (CGF) had asked for the athlete's accreditation to be revoked.
He said: "We've had a request from the Commonwealth Games Federation that the accreditation of that athlete be revoked.
"It is a matter before the courts, it's an allegation, and the reason that the accreditation has been revoked is because there are rules that you abide by as a resident of the village and the CGF has seen that there is a breach of village life and have revoked his accreditation."
He added: "Our athlete has legal representation and we make sure that the athletes' welfare is our number one priority."
Asked whether there would be any implications for Etoundi's medal, Mr Moneghetti said: "I certainly haven't got to that stage of discussions. There's been absolutely no discussions in relation to his medal.
"I want the legal process to take its course today. Talking about something like that, I think it's irrelevant at this point in time."
The incident is understood to have involved a Welsh athlete. Mr Moneghetti said that they have a "cordial" relationship with Team Wales.
A Police Scotland spokesman said: "A 29-year-old man has been arrested and is presently detained in police custody in connection with an alleged assault following an altercation within the athletes' village in Glasgow on Wednesday."
The 35-hectare village hosts 4,500 competitors from the 71 countries taking part in the Games, along with another 2,300 support staff.
The 700-house village cost around £230 million to build and has its own pub, post office, beauty salon, shops and mini-hospital.