The Master of Science (MSc) students of the University of Agriculture, Faisalabad (UAF) in Punjab province have the right to appeal against the ruling within a month.
A student alleged that the children of high-ranking officials and other influential people were unduly facilitated in their examinations.
"This environment of nepotism, corruption and mismanagement at the university has to be stopped," he said.
They were found to be involved in defaming the vice- chancellor and the administration on Facebook.
"The action against the students has been taken after an inquiry committee found them involved in defaming and levelling serious allegations of corruption against the varsity administration," the university said in a statement.
This is a rare case in the country where six students have been expelled for criticising the administration on social media.