Sonia Gandhi reportedly agrees that Mr Tharoor has embarrassed and hurt the party with his "unnecessary adulation of PM Modi" in columns on ndtv.com and other sites.
"As a loyal worker of the Congress, I accept the decision of the party president," said Shashi Tharoor.
The action against him telegraphs Mrs Gandhi's stern message that any deviation from the party's line on PM Modi is unacceptable.
Kerala Congress leaders had alleged that the 58-year-old Mr Tharoor had repeatedly been appreciative of the Prime Minister.
The two-time MP from Thiruvananthapuram incensed his party by saying he was "honoured" to be among nine prominent Indians tagged by the Prime Minister when he launched his five-year Clean India campaign on Mahatma Gandhi's October 2 birth anniversary.
In his column on ndtv.com, Mr Tharoor wrote, "Which Indian worthy of the name would not be humbled to be tapped by his PM for a national cause?"
The former union minister also commented that Mr Modi "had been effective in using his Prime Ministerial position" to drive change from the top.
A Congress publication in Kerala tore into Mr Tharoor for writing "love songs" for PM Modi and compared him to "Siberian migratory birds who come looking for optimum climate."
The action against Mr Tharoor comes at a time questions connected to the death of his wife Sunanda Pushkar at her hotel room in January have resurfaced. The Delhi Police are yet to pinpoint how she died; a team of doctors from AIIMS has said the 52-year-old died of poisoning.
Congress spokesperson Shobha Oza said, "Tharoor's statements were not received well by the (Kerala Congress). This has nothing to do with Sunanda Pushkar's case."
Criticising the action against Mr Tharoor, the BJP's Siddharth Nath Singh said, "If a PM does good work praise should be accepted as natural but the Congress has not learnt any lesson."