Lidia Thorpe has been suspended from the Senate for the remainder of the parliamentary sitting week, after she ripped up a motion by Pauline Hanson on the chamber floor on Wednesday.
It means she cannot vote or participate in debate until the end of the session on Thursday.
Senate President Sue Lines said Senator Thorpe's behaviour was "physically threatening" and "would not be tolerated."
She said she had told the independent senator it would be "in [her] interest to attend the Senate" to explain her conduct, but that she had declined to do so.
The motion to suspend was moved by Labor Senate leader Penny Wong, who said "the gravity of the conduct" necessitated suspension.
"All Australians have a right to be safe at work … We all have a responsibility for our behaviour. We express our views respectfully to understand each other's perspective," she said.
Senator Wong said there had been "dozens of instances" of Senator Thorpe making "abusive comments … [and] offensive gestures" in the chamber, and that she had caused distress to other First Nations senators.
"Despite attempts to work with Senator Thorpe, she has been increasingly been engaging in this behaviour."
Labor and the Coalition voted in favour of the suspension alongside One Nation, Ralph Babet, David Pocock and Jacqui Lambie.
Liberal Senate leader Simon Birmingham said the vote was a "line in the sand," and that Senator Thorpe's escalation to "physical" behaviour rather than verbal necessitated a response.
The Greens voted against. The ABC has contacted Senator Thorpe's office for comment, but a spokesperson said she would not do so on Wednesday.
Rowdy scenes over Hanson motion
Senator Hanson's Wednesday morning motion, which sought to question Fatima Payman's eligibility to sit in the Senate, was at the centre of rowdy scenes, prompting furious accusations of "vile" racism from Senator Payman.
The dispute revolved around Section 44 of the constitution, which prevents anyone holding foreign citizenship from sitting in parliament.
Senator Payman sought legal advice when she was selected as a Labor candidate, which said she had taken all possible steps to renounce her Afghan citizenship, making her eligible even though Taliban authorities, from whom her family fled, had not recognised the renunciation.
"You're not just vindictive, mean, nasty, you bring disgrace to the human race. No dignity whatsoever as a senator," a furious Senator Payman said in response to the stunt.
Senator Thorpe tore up Senator Hanson's motion and threw it at her. Senate President Sue Lines later said both senators Hanson and Thorpe had been spoken to.
Speaking after the suspension, Greens Senator Larissa Waters said the Greens did not support Senator Thorpe's behaviour and "do not condone the use of physical violence," but said the "racially charged overtones" of Senator Hanson's motion gave "context" to the behaviour.
"A number of senators feel unsafe due to the conduct of Senator Hanson … Let those of us who live with white privilege remember that institutional racism doesn't affect us like it affects people of colour," she said.
Senator Birmingham criticised the Greens, saying their failure to vote for the motion cut against cross-party efforts to improve parliamentary culture.
Crowded Senate agenda up in the air
The move threatens to derail Labor's crowded Senate agenda in the final sitting week of the year, with more than a dozen bills the government is hoping to pass in a dwindling window.
Government sources said they were unsure whether the social media ban would now be passed on Wednesday evening, as had been planned.
And Senator Thorpe's vote could be decisive as the government tries to guillotine debate to expedite passage of its bills.
In a tight Senate where the government needs at least three votes in addition to the Greens, her vote could also be crucial for any bills the Coalition does not support, including the Build to Rent housing bill and bills related to the Future Made in Australia investment program.
The votes of senators Payman, David Van, Tammy Tyrrell, and Ralph Babet, and One Nation would then come into play.