Party sources told Reuters that his wife Grace Mugabe has also been expelled from the party. She was also stripped of her position as chair of the party’s women’s league.
Zimbabwe's parliament, according to The Guardian, will reconvene on Tuesday and is expecting to move to impeach the president if he has not given up power.
Mugabe's grip on power was broken last week when the military took over after his wife Grace emerged as the leading candidate to succeed the 93-year-old president, who is the world's oldest head of state.
"We meet with a heavy heart," party official Obert Mpofu told the ZANU-PF meeting in Harare on Sunday, referring to Mugabe as "the outgoing president".
"(Mugabe's) wife and close associates have taken advantage of his frail condition to usurp power and loot state resources," he said.
"Our people are demanding... the recall of the president and first secretary of ZANU-PF from his position in the party."
The Guardian also reported that when the motion to remove Mugabe as head of party was passed, the hall broke into cheers, song and dance.
Zimbabweans have experienced a historic week in which the military seized power and put Mugabe under house arrest in response to his sacking of vice-president Mnangagwa, chief rival of Mugabe's powerful 52-year-old wife Grace.
On Saturday, in scenes of public euphoria not seen since Zimbabwe's independence in 1980, huge crowds marched and sang their way through Harare and other cities.
The demonstrations included citizens of all ages, jubilant that Mugabe appeared to be on his way out.
In central Harare, a group of young men tore down a green metal street sign bearing Robert Mugabe's name and smashed it repeatedly on the road.
Such open dissent would have just a week ago been routinely crushed by security forces.
Peace, jobs, a normal life
The majority of Zimbabweans have only known life under Mugabe's rule, which has been defined by violent suppression, economic collapse and international isolation.
Sources suggest Mugabe has been battling to delay his exit and to secure a deal guaranteeing future protection for him and his family.
He attended a university graduation ceremony on Friday, in a show of defiance at the talks with General Constantino Chiwenga, who led the military power grab.
The succession race that triggered Zimbabwe's sudden crisis was between party hardliner Mnangagwa – known as the Crocodile – and a group called "Generation 40" or "G40" because its members are generally younger, which campaigned for Grace's cause.
"She is very acceptable. Very much accepted by the people," Mugabe said of Grace in a faltering interview to mark his 93rd birthday last February.
The president, who is feted in parts of Africa as the continent's last surviving liberation leader, is in increasingly fragile health, but previously said he would stand in elections next year that could see him remain in power until aged nearly 100.
He became prime minister on Zimbabwe's independence from Britain in 1980 and then president in 1987.
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