The three-time former prime minister told thousands of supporters outside his residence in Rome that he would "fight on" despite the vote, saying it was "a day of bitterness, a day of mourning for democracy".
"We are not going to retire to some convent," Berlusconi said in a defiant speech, as fellow senators began voting that ended up forcing him from parliament for the first time in his 20-year political career.
One loyalist senator even compared the scandal-tainted Berlusconi to South African anti-apartheid icon Nelson Mandela and two rival senators almost came to blows.
Senate speaker Pietro Grasso said the failure of the motions meant that a proposal "abolishing the election of senator Silvio Berlusconi" was considered approved.
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Berlusconi will now be banned from taking part in any general election for six years and will lose his parliamentary immunity, which offers safeguards against arrest.
Experts said the expulsion marks another step in Berlusconi's slow-motion demise, although he will continue to wield major clout even as an ex-lawmaker.
Opinions were mixed in the streets of Rome.
"We managed to put an end to 20 years of fascism, we can put an end to 20 years of Berlusconism too. I hope then we will become a more grown-up country," said Giulio, a passerby in the trendy Trastevere district.
Several polls show that the 77-year-old Berlusconi's popularity is undimmed among his core supporters and that a centre-right coalition led by him as figurehead could win a future election.