IOC Vice President Craig Reedie, the former head of the international badminton federation, welcomed the decision.
"Sport is competitive," Reedie told the AP. "If you lose the competitive element, then the whole thing becomes a nonsense.
"You cannot allow a player to abuse the tournament like that, and not take firm action. So good on them."
The eight disqualified players are world doubles champions Wang Xiaoli and Yu Yang of China and their South Korean opponents Jung Kyun-eun and Kim Ha-na, along with South Korea's Ha Jung-eun and Kim Min-jung and Indonesia's Meiliana Jauhari and Greysia Polii.
The players went before a disciplinary hearing Wednesday, a day after spectators at the arena booed their performance after it became clear they were deliberately trying to lose.
Paul Deighton, chief executive officer of the London organizers, said there would be no refunds for the evening's badminton program. Chairman Sebastian Coe called what happened "depressing," adding "who wants to sit through something like that?"
Teams blamed the introduction of a round-robin stage rather than a straight knockout tournament as the main cause of the problem. In the round-robin format, losing one game can lead to an easier matchup in the next round.
The Chinese players were accused of leading the way by deliberately losing a game. This led to other teams behaving in a similar way to try to force an easier quarterfinal. At one stage, both teams appeared to be trying to lose.
Wang and Yu and their opponents were booed loudly by the crowd after dumping serves into the net and making simple errors, such as hitting the shuttlecock wide.