The party voted to disendorse her as a candidate for the November election at a meeting on Friday evening.
The party reached the widely-expected outcome at its Collins Street headquarters, which required support from 75 per cent of its 19 members.
Liberal leader Jess Wilson confirmed the move following the meeting."This matter is now concluded. My singular focus remains on the issues that matter to Victorians and outlining our plan to deliver a fresh start this November," Ms Wilson said in a statement on Friday.
The path was cleared after Mrs Deeming earlier in the week withdrew a legal challenge seeking to prevent the party from moving against her.
The state executive had planned to meet to decide on the future of her candidacy earlier in July after she failed to apologise over an incident in May.
The MP had accused colleague and former party leader Matthew Guy of grabbing her "violently" in a headlock, but since claimed she misunderstood the meaning of headlock.
Vision obtained by AAP from a function in May showed Mr Guy placing his hand on Mrs Deeming's upper back as they lean in to talk to one another.
Mr Guy told reporters in June Mrs Deeming owed him a public apology, adding he vehemently denied that anything untoward took place.
"Moira Deeming owes me a public apology. I'm owed an apology by the premier and the attorney-general," he said in a statement outside parliament.
"They can come to me the honourable and easy way, or a harder way."
Mrs Deeming had attempted to stop the party from voting to drop her as a candidate.
She launched the legal action on July 3, prompting the party executive to give an undertaking it would not take steps to disendorse until it was resolved.
The legal action was officially withdrawn, paving the way for Friday's meeting.
On Wednesday, Mrs Deeming sent a 12-page statement to the party's state executive, providing a mediation proposal that allowed her to end the supreme court action.
"The state executive, having all the evidence before them, can now decide whether to pursue mediation or reconvene to disendorse me," she said.
Mrs Deeming said she had been overseas when the story broke and the injunction allowed her time to gather her thoughts and recover from illness and jet lag.
The bruising round of Liberal infighting flared just months out from the November 28 state election.
Tensions within the party have simmered since a crushing defeat at the 2022 election, spilling into a defamation lawsuit by Mrs Deeming against former leader John Pesutto.
The opposition is hoping to turf out a three-term Labor government and fend off an insurgent One Nation, which is yet to anoint a state leader.
