The 27-year-old was stripped of her fourth-placed finish in the 48 kg category held on Saturday.
Nan Aye Khine gave a urine sample on Thursday which tested positive for the unnamed steroid, the IOC said.
The IOC's disciplinary commission held a hearing with the athlete on Sunday at which she said she had taken a herbal remedy on a regular basis, the contents of which had not been examined by a doctor.
The commission unanimously ruled that Nan Aye Khine had committed an offence and disqualified her from the event and immediately withdrew her Olympic accreditation.
It also requested the International Weightlifting Federation to modify the result of the event and consider any further action.
Under the World Anti-Doping Agency code, a positive drugs test is accompanied by an automatic two-year ban.
Myanmar's national Olympic committee was ordered to return the diploma awarded to the athlete for finishing fourth to the IOC.
She is the second athlete to test positive during pre-Games testing in Athens following Kenyan bantamweight boxer David Munyasia, who was expelled on Friday after a positive doping result for the banned substance cathine.
