A motion to expel the conservative upper house MP from the state's parliamentary Liberal Party was passed by his colleagues on Tuesday morning.
Mr Finn came under fire in early May after posting on Facebook he was "praying" for abortion to be banned in Victoria when it emerged the US Supreme Court could overturn its landmark Roe v Wade decision.
He later told an online user he did not support abortion in cases of rape, drawing the ire of colleagues including state Liberal leader Matthew Guy.
It is understood coalition MPs were also furious with the timing of his comments, which emerged the day of the opposition's unofficial budget reply.
Mr Finn resigned as opposition whip in the Legislative Council the following week, suggesting Mr Guy's public criticism was "the last straw".
Following the expulsion on Tuesday, Mr Guy insisted it was because of the veteran MP's behaviour, not beliefs.
"This motion is about respectful discourse. It is not about naval-gazing from the federal election or other issues," Mr Guy told reporters.
"I expect discipline from all members of the parliamentary party."
Mr Finn did not lobby colleagues for clemency and instead addressed supporters, who gave him a hero's welcome post-result on the front steps of Victorian parliament.
As the coalition faces an existential battle after losing at least four Melbourne seats to Labor and teal independents in Saturday's election, Mr Finn said the free speech-touting party he joined 41 years ago was "dead".
"The party of Menzies and Howard is no more - not in Victoria," he said.
"If you hold a view opposite or different from the leader in this party you run the risk of expulsion. I have done nothing wrong.
"Just as I will not be bullied by (Premier) Daniel Andrews, I will not be bullied by Matthew Guy either."
The Western Metropolitan MP is weighing up whether to run at the November state election after previously being approached by "six or seven" minor parties, including the Liberal Democrats.
Mr Finn, who remains a member of the Liberal Party proper, would not rule out forming his own party or joining another before the election.
"I was seriously thinking about retiring at this election ... and this has given me a new lease on life. So thank you, Matthew Guy."
He has repeatedly stoked online controversy in recent years, depicting the premier as a Nazi, calling Victoria Police a "despot's militia" and posting pro-Trump conspiracy theories.
Mr Andrews said the Liberal ructions were a sign of the differing priorities of the major parties.
"I'll leave them to be bitterly divided," he said.
Mr Finn's expulsion drops the Victorian coalition's upper house members to 10 and lifts cross bench numbers to 14, two fewer than the Andrews government.
Prominent upper house crossbencher and Reason Party leader Fiona Patten questioned whether Mr Finn could retain his spot in state parliament by appealing to pro-life advocates.
"I don't like his chances," she said.
The 61-year-old has been a member of Victoria's upper house since 2006 after sitting in the lower house from 1992 to 1999.
