Sohan Singh, Labour councillor for the North East ward, has also been removed from the board of Strathclyde Fire and Rescue.
The moves follow claims he used a blue badge belonging to a relative to access a disabled parking space.
It is understood Mr FROM PAGE 1
Singh was representing the council at a meeting of the fire board at South Lanarkshire Council in Hamilton when he was spotted using the bay.
The badge, which is issued by the city council, is understood to give free parking to the holder until 2014. Fraudulent use carries a penalty of up to £1000.
A statement from the council's Labour group said: "Councillor Sohan Singh has been suspended from the Labour group for eight weeks and removed from the Board of Strathclyde Fire and Rescue with immediate effect.
"This follows an investigation into allegations of misuse of a blue badge.
"In line with the group's standing orders, Councillor Singh was found to have committed a serious breach of rules by failing to uphold the highest standards of integrity and probity expected of Labour councillors."
Mr Singh has accepted the ruling and apologised for the incident.
He said: "I fully accept my behaviour has fallen short of the standards expected of elected officials.
"This is a source of deep regret. I accept full responsibility for my actions and apologise unreservedly."
Mr Singh, who owns the Lorne Hotel in Sauchiehall Street, was only elected to the city council in May. However, within weeks, he was stripped of a ceremonial role standing in for the Lord Provost after it emerged he had been operating illegally as a landlord in flats he bought from the council for £1.
Mr Singh failed to register in a mandatory scheme that can result in rogue landlords facing fines of up to £50,000.