Ms Deeming sparked controversy in March after attending a rally where neo-Nazis performed the "heil Hitler" salute.
She was originally suspended for nine months, but an expulsion motion was brought to the party room on Friday after she served Liberal leader John Pesutto with a defamation concerns notice.
Liberal MPs subsequently voted 19 to 11 to expel Ms Deeming from the parliamentary party for "bringing discredit" to the Victorian Liberals.
Mr Pesutto maintained Ms Deeming's expulsion was not about her views, instead suggesting her legal threat did not sit well with MPs.
Ms Deeming said she felt betrayed by the action, telling the Herald Sun she had honoured the terms of her suspension even when Mr Pesutto did not.
She also maintained she would not quit the Liberal Party.
"If they want to get me out of the party, then it's going to be another public round of beating me up for doing nothing wrong," Ms Deeming said.
"And if they want to have another go, they are welcome to it, but I know how much support I've got amongst party members because thousands and thousands of them have contacted my office since March."
Ms Deeming said her legal action against Mr Pesutto was a matter for her lawyers.
Mr Pesutto on Friday said he would "vigorously defend" any legal challenge.
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