The Kilroy programme will be taken off air immediately following comments made by Robert Kilroy-Silk in a newspaper article, the BBC has announced.
The Kilroy programme will be suspended from Monday
The presenter branded Arabs "suicide bombers, limb amputators, women repressors" and asked what they had given to the world other than oil.
The BBC stressed the comments did not reflect its views as a broadcaster.
It said the BBC One programme would be suspended from Monday while it investigated the matter fully.
The Muslim Council of Britain (MCB) described the piece written by the discussion show host in last week's Sunday Express as a "gratuitous anti-Arab rant".
Mr Kilroy-Silk's article included comments saying the toppling of despotic regimes in the Middle East should be a war aim, and questioned the contribution of the Arab nations to world welfare and civilisation.
He said Arabs "murdered more than 3,000 civilians on 11 September" and then "danced in the streets" to celebrate.
Reported to police
The MCB secretary general Iqbal Sacranie wrote in a letter to BBC One controller Lorraine Heggessey that Mr Kilroy-Silk had failed to distinguish between the terrorists behind the 11 September attacks and 200 million "ordinary Arab peoples".
Mr Sacranie condemned the "bigoted and ill-informed ideas" in the piece, which he said was "ignorant, extremely derogatory and indisputably racist".
Hours before the suspension was announced, Labour MP Lynne Jones urged the BBC to "consider the position" of Mr Kilroy-Silk, who is not a member of staff but works for the corporation on a freelance basis.
She tabled a Commons motion denouncing his comments as "racist".
The Commission for Racial Equality (CRE) reported the matter to the police.
CRE chairman Trevor Phillips, who commended the BBC for taking swift action on the matter, said: "It is unbelievable. It's not just what he says, but the way he says it, which is completely offensive, and the level of ignorance he shows."
Such comments had to be challenged or law-abiding Muslims would be made to feel that the extremists were right and that most non-Muslims actually hated them, Mr Phillips added.
BBC Breakfast will continue for an extra half hour, to 0930, while Kilroy is off air.
BBC media correspondent Torin Douglas said the issue was so serious the investigation was likely to be considered by the governors as well as
senior managers and editorial policy.
"Many people would see it very hard for him to continue with a programme that deals with current affairs matters having made such comments," he said.
Only last month the BBC tightened up guidelines regarding presenters writing for newspapers, particularly about current affairs or contentious issues.
Mr Kilroy-Silk owns the company that makes the programme.