The motion to suspend Lim was tabled by Minister in the Prime Minister's Department Datuk Seri Azalina Othman Said.
After a heated debate, the motion was approved by bloc voting - 107 for and 77 against.
The House turned chaotic as the lawmakers argued the validity of the motion.
Lim, who was given a final chance to explain himself in the House, remained defiant, saying he was saddened by "the fiasco."
"I have been an MP for 40 years and I have never felt so sad, its not because of my suspension but I am sad by what is taking place here.
"This is an insult to Parliament, it shows how shallow you all are," he said.
Lim stressed that he had never insulted the Speaker, adding that "my fate is sealed."
Lim said he was the "latest victim" in the 1Malaysia Development Bhd debacle, adding that the issue had changed the institution of Parliament.
In winding-up, Azalina said Lim was given ample time, "several days to be exact," to apologise but he refused.
"I am saddened that as a veteran politician he refused to apologise. The government has no choice but to table this motion," she said.
Lim, the Gelang Patah MP, waved and said "bye-bye" and left the House. Some Barisan Nasional lawmakers waved back at him.
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