The 12-time Olympic medalist will not be allowed to compete in the 2017 National Championships, rendering him ineligible for the 2017 FINA World Championships in Hungary, said the US Olympic Committee (USOC) and USA Swimming in a statement Thursday.
Lochte must also perform 20 hours of community service, and forfeits access to USOC training facilities and funding.
The other three swimmers involved in the episode -- Gunnar Bentz, Jack Conger and James Feigen -- also face suspensions of four months.
"As we have said previously, the behavior of these athletes was not acceptable," said USOC Chief Executive Officer Scott Blackmun.
"It unfairly maligned our hosts and diverted attention away from the historic achievements of Team USA."
The gas station incident
The gas-station episode, and Lochte's "exaggerated" description of it
later to newscasters, created an international hubbub and an embarrassment for Olympic officials.
Lochte, 32, initially said he and three other swimmers were the victims of a dramatic robbery when returning by taxi from a late-night party. He later backtracked after a police investigation found the swimmers were stopped by security guards at a gas station after committing an act of vandalism and paid approximately $50 in damages.
Bentz, Conger and Feigen have since publicly shared their version of the events with stories that differ from Lochte's original tale and essentially match surveillance video released by Brazilian police.
Lochte has apologized for poor behavior at the Rio gas station on the morning of August 14. The group had stopped there to use the bathroom and, finding the door locked, urinated behind the building, during which time Lochte reputedly tore down a framed poster from the building's wall.
Brazilian authorities have since charged Lochte
with falsely reporting a crime, which could bring a fine or up to six months in jail. When his court hearing comes up, Lochte can opt to send a lawyer on his behalf and does not need to appear in court in Rio.
The police investigation began after Lochte had returned to the United States. The three other swimmers were blocked from leaving Brazil
and one, Feigen, faced a Brazilian judge for his statements to police regarding the gas station incident.
He agreed to pay $10,800 to a charity to settle the case. Brazilian authorities brought no charges against Bentz or Conger.
Lochte has since taken responsibility publicly, saying the international Olympic scandal was his fault and caused by his "immature behavior."
"I over-exaggerated that story and if I had never done that we wouldn't be in this mess," he told NBC's Matt Lauer.
With Lochte ruled out of the 2017 world championships in Hungary
, his next opportunity for a long-course world championship meet would be in 2019. He would turn 35 in August of that year.
Long course is the term for a 50-meter pool, the length used in the Olympics. Lochte also has previously competed in short-course world championships
, in 25-meter pools; the next one beyond his reported suspension is in 2018.
The swimmer's sponsorship deals have taken a hit
since the incident, with Speedo, Polo Ralph Lauren, Gentle Hair Removal and mattress maker Airweave all saying they would be cutting ties with Lochte.
However, he has gained new sponsorships from Pine Bros. cough drops
and Robocopp, a crime prevention device maker.
Lochte also scored a slot
on Season 23 of ABC's "Dancing With the Stars."