The Carlisle, Pennsylvania, college launched the probe in August after The New York Times published a story showing Walsh borrowed heavily from other sources for a research paper he wrote in 2007.
Walsh's office released a statement Friday saying the Army War College revoked his status as a graduate, and that he disagrees with the findings but accepts the decision.
Walsh was appointed to his Senate seat in February and was the Democratic nominee for the seat. He dropped out of the race after the plagiarism allegations surfaced, saying the controversy surrounding his research paper had become a distraction.
The New York Times story in July found Walsh's 14-page paper on spreading democracy in the Middle East improperly cited some passages and lifted others from different sources without attribution. The research project was a requirement for graduation in the 10-month program.
The college assigned the case to its academic review board, which began its investigation Aug. 15 after giving Walsh time to submit documentation in his defense.
Walsh has called the unattributed use of others' work an "unintentional mistake." He said he was being treated for symptoms of post-traumatic stress disorder following his deployment in Iraq, but added he was not blaming PTSD for his mistake.
Walsh was appointed to the Senate seat in February when Max Baucus resigned to become ambassador to China. Even before the plagiarism allegations, he was in a tough race against first-term Republican Rep. Steve Daines with control of the Senate on the line. Republicans need to gain six net seats this fall to take Senate control.