Governor RotimiAmaechi, from oil-rich Rivers state, won a vote over the weekend to chair the country's governors' forum.
But his rival from Plateau state, Jonah David Jang, disputed the outcome and declared himself chairman.
The governors of Nigeria's 36 states are extremely influential and have large budgets at their disposal.
Mr Amaechi, the incumbent chairman of the governor's forum, won with 19 votes to 16. One governor did not attend.
Mr Jang, also in the ruling People's Democratic Party (PDP), disputed the outcome.
Analysts say the president's allies are determined to clip Mr Amaechi's wings.
At an emergency meeting of the PDP's National Working Committee on Monday, officials said Mr Amaechi was being suspended for violating party rules.
This was not in relation to the governors' forum vote, but over a local council issue in his southern Rivers state.
Our correspondent says some governors command multi-billion dollar budgets that are larger than those of whole countries in the region.
This electoral dispute is a worrying sign as the country heads for elections in two years' time, he says.
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