Before the second and last climb to Mount Etna in Sicily, television images showed Moreno riding up to and grabbing Team Sky rider Diego Rosa by the back of the shirt.
The 32-year-old Spaniard was seen shouting or warning the Italian, behaviour which officials from the race jury reacted to by expelling Moreno and leaving Nibali with one less teammate for the remainder of his home race.
Moreno was charged with "acts of violence" that earned him a "fine of 200 Swiss Francs (182 euros, $198) and elimination" from the race, according to a statement by Giro d'Italia organizers.
Nibali, the 20013 and 2016 Giro champion who also won the 2015 Tour de France, faces a tough challenge this year from 2014 champion Nairo Quintana as he looks to bag his third pink jersey.
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Photo: Alberto Pizzoli/AFP