The International Olympic Committee acted after investigations by the sport's governing body determined that Dong Fangxiao was only 14 at the 2000 Games. Gymnasts must turn 16 during the Olympic year to be eligible.
Dong's results from Sydney were nullified in February by the International Gymnastics Federation. Because her scores contributed to China winning the team bronze, the FIG recommended the IOC take the medal back.
As expected, the IOC executive board upheld the request and formally stripped the medal on the first day of a two-day meeting in Dubai.
The U.S. women, who had been fourth, move up to the bronze.
IOC spokesman Mark Adams said Dong was also stripped of her sixth-place result in the individual floor exercises and seventh place in the vault.
Questions about Dong's eligibility arose during the FIG's investigation into the ages of China's team that won the gold medal at the 2008 Beijing Games. Media reports and Internet records suggested some of the girls on that team could have been as young as 14.
The FIG cleared the Beijing Games gymnasts in October 2008 after Chinese officials provided original passports, ID cards and family registers showing all of the gymnasts were old enough to compete. But the FIG said it wasn't satisfied with "the explanations and evidence provided to date" for Dong and a second gymnast, Yang Yun.
Dong's accreditation information for the Beijing Olympics, where she worked as a national technical official, listed her birthday as Jan. 23, 1986. That would have made her 14 in Sydney - too young to compete. Her birth date in the FIG database is listed as Jan. 20, 1983.
Dong's blog also said she was born in the Year of the Ox in the Chinese zodiac, which dates from Feb. 20, 1985, to Feb. 8, 1986.
FIG investigators didn't find sufficient evidence to prove Yang, who also won a bronze medal on uneven bars in 2000, was underage. She received a warning from the FIG.
The bronze medal salvages what had been a disappointing Olympics for the U.S. women. The squad - Amy Chow, Jamie Dantzscher, Dominique Dawes, Kristin Maloney, Elise Ray and Tasha Schwikert - left Sydney empty-handed, the only time since 1976 the American women had failed to win a single Olympic medal.