A statement issued by party leadership Monday said David Chaytor, Elliot Morley and Jim Devine had been "administratively" suspended, The Times of London reported.
"The Labor Party's general secretary has today suspended David Chaytor, Jim Devine and Elliot Morley's membership of the Labor Party in light of the serious allegations against them," the statement said.
The Times said the trio had already been prohibited from running for Parliament as Labor candidates. It quoted an unnamed party source as saying, "The effect of this is that they can no longer call themselves Labor members or Labor MPs."
The three are facing prosecution on several counts each of false accounting under the Theft Act, stemming from last year's scandal over dubious expense claims made by MPs of both major parties.
The Times said the trio failed in a bid to claim parliamentary privilege to avoid prosecution.
"The criminal law applies to MPs just the same as it does to everyone else," deputy Labor Party leader Harriet Harman told the BBC.