At a meeting in the Ethiopian capital Addis Ababa, the AU’s Peace and Security Council decided to suspend Guinea Bissau “until the restoration of constitutional order”.
The suspension takes immediate effect.
The AU also says it will ask for international sanctions to be imposed on the country.
Soldiers toppled the government last Thursday over its alleged plans to reduce the size of the army.
The West African regional bloc, Ecowas, says the soldiers have agreed to return the country to civilian rule.
The president of the Ecowas commission, Kadre Desire Ouedraogo – who has been in Bissau for talks with the coup leaders – did not say when constitutional order would be restored.
There has been no word from the military.
Mr Ouedraogo said he had asked for political prisoners to be released, including Prime Minister Carlos Gomes Junior, who was arrested during last week’s coup. BBC