Singh was the party's candidate from the Gurdaspur Lok Sabha constituency and has led many social movements in the state.
The decision to make changes in the state unit was taken in a joint meeting of the Political Affairs Committee of the party and the Punjab state executive committee here.
It also comes at a time when the party lost miserably in the recently held by-polls in the state where its candidates lost their deposit.
"It was resolved that strict disciplinary action would be taken against those indulging in anti-party activities and seek to kill the idea of clean politics in Punjab by hurting Party. AAP is committed to a drug-free and corruption-free Punjab," the party said.
Of the 426 candidates it fielded across the country, the party won only four MPs from Punjab. It now wants to focus on assembly election and plan to make inroads in the state.