Meretnyyazov failed to stop a men's bantamweight bout on Wednesday despite one fighter being knocked down six times in the final round.
He was expelled with immediate effect and AIBA said he was on his way home.
A second referee, Frank Scharmach of Germany, was suspended for five days by AIBA and a technical official from Azerbaijan sent home.
"I deeply regret that we had to take these decisions," AIBA President Wu Ching-Kuo said in a statement.
"However, our main concern has been and will always be the protection of the integrity and fair-play of our competitions. I will take all possible steps to reinforce this."
He later told Reuters: "There is only one truth and we always get to the truth."
Japan's bantamweight Satoshi Shimizu, trailing by seven points going into the last round against Magomed Abdulhamidov, knocked the Azerbaijani down six times, the first of which he struggled to get up from.
The judges scored the round 10-10, handing Shimizu two extra points for a warning against Abdulhamidov, who propped himself up against the top rope as the referee raised his hand in victory.
The 25-year-old fighter was helped out of the ring by his trainer and Shimizu's team appealed the outcome.
The Japanese boxer's team leader Masamori Yamane accused the referee of trying to support Abdulhamidov by attempting to fix his headgear.
After deliberating for over an hour, AIBA said that under its rules, the referee should have given the Azerbaijani fighter "at least" three standing counts which would have resulted in the contest being stopped.
They, therefore, overturned the result, handing victory to Shimizu, who was staggered by the original decision hours earlier.
"I was shocked about the result. He fell down so many times.
Why didn't I win? I don't understand," Shimizu said, adding he thought the referee should have stopped the fight with Abdulhamidov obviously groggy in the final round.
"This is the second Olympics I have attended and even in Beijing I wasn't happy about the judgement, so I don't know what to do about that. I am really not happy about that."