WADA said IFBB's "non-conformities" in implementing a testing regime and insufficient resources towards development of an anti-doping program prompted the move.
The statement from the global anti-doping body said that IFBB did not dispute its claims.
All of IFBB's testing activities would be subject to third-party supervision as a result, while its representatives will be excluded from taking part in or attending any multi-sport events - including the Olympics - until reinstatement, WADA said.