Television footage clearly shows the Italian cyclist - who won the tournament in 2010 - holding onto his team’s car and being towed back into the peloton.
The images, broadcast by sports channel Eurosport, show Nibali's team car pull up alongside him before both the car and the rider accelerate quickly.
Nibali, who won the Tour de France in 2014, was towed by his Astana team’s car after crashing on stage two of the race with around 30km of the stage remaining before reaching Malaga’s Caminito del Rey.
The crash gave the Italian rider a delay of one minute and 30 seconds.
"The commissaires met after the stage after learning of the existence of images broadcast by Eurosport in which Nibali is helped by one of his team’s vehicles," La Vuelta said in a statement released via the competition’s website.
"They have decided to disqualify the Italian and the director (of Astana) Alexander Sheffer, who was driving the Astana car," the statement said.
"The film shows clearly that Nibali was clinging to the car for 200 metres," added Bruno Valcic, the president of the race commissaires.