Luiz Felipe Scolari's men suffered a 2-0 loss in the round of 16 first leg, during which their fans aimed racial insults at Santos goalkeeper Aranha.
A Brazilian sports tribunal unanimously voted 5-0 for Gremio's exclusion, but the club are likely to appeal.
Four-time Copa champions Gremio were fined 54,000 Brazilian Real.
Santos forward Robinho, on loan from Milan, was on the scoresheet in Santos' 2-0 win at the Arena do Gremio in Porto Alegre.
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