The Press Association, which distributed the feature, was forced to apologise and refund a number of national newspapers that used it, following PRWeek's story on the issue.
The committee decided unanimously that Fuel PR was in clear breach of its professional standards and that the gravity of the reputational damage to the industry was so great that "termination of membership was the only option", according to a PRCA statement.
It is the first expulsion from the PRCA in a decade.
The committee also found that it would be "inappropriate" for Fuel PR’s managing director, Gillian Waddell, to remain as a Fellow of the PRCA and stripped her of the honour.
It concluded that the agency would not be able to reapply for membership of the PRCA for at least five years.
The PRCA said it had given Fuel PR two weeks to appeal its decisions, but no such appeal had been received.
Francis Ingham, PRCA director general, said: "It is with great sadness that the PRCA has taken this decision – the first expulsion since I became director general in 2007. However, no person or organisation is above the Code: it is the bedrock of our industry's professionalism."
Waddell told PRWeek: "We have not been members of the PRCA for months."