The Liverpool striker is also set to miss a large chunk of the English Premier season and is "banned from any football related activity."
The ban is the most severe ever handed out at a World Cup but the striker does have the right to appeal.
FIFA said Wednesday that it has begun proceedings after the striker was accused of biting another player during his team's World Cup victory over Italy a day earlier
Uruguay is set to play its last-16 game against Colombia in Rio de Janeiro on Saturday but will be without Suarez, who will start his suspension immediately.
The decision was announced by FIFA at a news conference Thursday.
"The first match of this suspension is to be served in the upcoming FIFA World Cup fixture between Colombia and Uruguay on 28 June 2014," said a FIFA statement.
"The remaining match suspensions shall be served in Uruguay's next FIFA World Cup match(es), as long as the team qualifies, and/or in the representative team's subsequent official matches."
FIFA also confirmed that Suarez is "prohibited from entering the confines of any stadium" during his ban and must pay a fine of 100,000 Swiss Francs -- $111,000.
"Such behavior cannot be tolerated on any football pitch, and in particular not at a FIFA World Cup when the eyes of millions of people are on the stars on the field," said Claudio Sulser, chairman of the FIFA disciplinary committee in a statement.
He added: "The Disciplinary Committee took into account all the factors of the case and the degree of Mr Suarez's guilt in accordance with the relevant provisions of the code. The decision comes into force as soon it is communicated."
Former Italian international Mauro Tassotti was given an eight-match ban in 1994, the longest suspension in World Cup history, after breaking the nose of Spain's Luis Enrique.
Already banned twice in his career for biting an opponent, the Uruguay striker was seemingly at it again in his country's key World Cup victory over Italy.
Just before Uruguay's winning goal, the striker was embroiled in an off the ball incident with Italy defender Chiellini with both men falling to the floor.
Television pictures showed Suarez dipping his head towards Chiellini, and when the Italian defender eventually got up, he pulled down his shirt and appeared to furiously indicate that he had been bitten on the shoulder.
The Uruguayan, who plays his club football with Liverpool, was banned for 10 games in April 2013 after being found guilty of biting Chelsea defender Branislav Ivanovic.
He was also guilty of biting during his time in the Netherlands with Ajax where he was banned for seven games after leaving a scar on the collarbone of Otman Bakkal.
Suarez's rap sheet is lengthy.
At the 2010 World Cup in South Africa, he deliberately handled the ball on the goal-line to deny Ghana a place in the semifinals of the World Cup.
He was sent off for his troubles but Ghana missed the penalty and Uruguay went on to finish third in the tournament.
The following year after his move to Liverpool, Suarez was found guilty of racially abusing Manchester United's Patrice Evra.
He was fined $63,000 and banned for eight matches.
Last week, after scoring both goals in his side's 2-1 victory over England, Suarez hit out at the British media after claiming he had been unfairly treated over his transgressions.
Before the game people in England laughed about my attitude over the last few years," he told reporters following the game.
"I want to see what they think now. I have dreamed of this moment."
Suarez enjoyed a sensational season with Liverpool -- scoring 31 league goals to help his club qualify for the Champions League.
He was voted Player of the Year by his fellow colleagues and also named as the journalists' Player of the Year too -- awards that reflected a feeling that Suarez had put behind him his troubled past.
But he now looks set to miss Liverpool's first nine Premier League games of the season and the start of the club's Champions League campaign.
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