Lochte, who won gold in the 4x200 meters freestyle relay in Rio, will also forfeit bonus money from the Games, the monthly funding he receives from USOC and USA Swimming and will not be allowed access to USOC training centers.
He will miss next year's national championships and will therefore not be eligible for the world championships in July. He must perform 20 hours of community service and will miss Team USA's post-Olympics trip to the White House.
Lochte, 32, admitted he "over-exaggerated" a tale about being robbed and held at gunpoint after a party during the Rio Olympics.
Gunnar Bentz, Jack Conger, James Feigen, Lochte's swimming team mates who were involved in the incident, also received sanctions for violating the USOC's code of conduct.
“As we have said previously, the behavior of these athletes was not acceptable. It unfairly maligned our hosts and diverted attention away from the historic achievements of Team USA,” said USOC CEO Scott Blackmun in a statement.
“Each of the athletes has accepted responsibility for his actions and accepted the appropriate sanctions.”
FINA, world swimming's governing body, said in a statement that it was satisfied with the sanctions and would not seek additional bans.
"Regarding the case of the four U.S. swimmers whose behavior at Rio 2016 has resulted in suspensions from the U.S. Olympic Committee and USA Swimming, and now that the key facts have been established, FINA considers the sanctions applied as proportionate, adequate and sufficient," FINA said.
"In light of these measures, FINA will not apply additional sanctions and will implement those now imposed on the swimmers at all FINA events."
Bentz, Conger and Feigen will be suspended from domestic and international USA swimming national team competitions for four months and will not receive monthly funding from USA Swimming or USOC during that period.
They will also have no access to training facilities and will not attend Team USA's White House visit.
Bentz will also perform 10 hours of community service for violating a USA Swimming Olympic Village curfew placed on athletes under the age of 21.
In what became one of the biggest stories of the Rio Games, Brazilian authorities said the group of swimmers destroyed a bathroom and urinated in public, and have recommended that Lochte be charged with falsely reporting a crime.
Late last month, ABC television said Lochte was joining the cast of "Dancing With the Stars", a competition in which celebrities are paired with professional ballroom dancers.
That announcement came as the gold medalist said he thought reaction to his Rio de Janeiro tale had been blown out of proportion.
"During an otherwise extraordinary Olympic Games, a small group of athletes had lapses in judgment and conduct that are unacceptable and not consistent with our expectations," said USA Swimming executive director Chuck Wielgus. "When Code of Conduct infractions occur, it’s our responsibility to take action that reflects the seriousness of what happened.
"Unfortunately, this storyline took attention away from the athletes who deserved it the most."