The Olympic Council of Asia (OCA) announced on Tuesday that Tai had tested positive for sibutramine, a banned stimulant often found in weight-loss pills.
She was automatically disqualified from Asia's biggest multi-sports event and stripped of her accreditation.
The 22-year-old Tai won a gold medal on the first day of competition in Incheon, South Korea, taking out the women's nanquan and nandao all around competition in the martial arts sport.
The OCA said her urine specimen was later found to contain sibutramine, which was added to the World Anti-Doping Agency's (WADA's) list of banned substances earlier this year.
The OCA released a statement confirming the positive test and the initial penalties imposed on Tai: "After due process according to the rules and procedures of the OCA, it has been determined that the above finding constitutes an anti-doping rules violation and as such the following sanctions has been taken.
"1. The Competitor has been disqualified from the competition as well as these Games and as such her accreditation cancelled and her medal withdrawn.
"2. These findings will now be forwarded to the competitor’s national authorities, the International Federation of the sport concerned (Asian & International WUSHU Federations) and the World Anti-Doping Agency for further action on their part as per sanctions concerning eligibility."
Indonesia's Juwita Niza Wasni, who finished second in the competition, will be promoted to the gold medal position while China's Wei Hong will move up to the silver medal and Ivana Ardelia Irmanto of Indonesia to the bronze after originally finishing fourth overall.
Tai, who won the world championship in the nanquan discipline last year, was the third athlete to fail a doping test at the 17th Asian Games, which end in South Korea on Saturday.
Cambodian soft tennis player Yi Sophany was also thrown out after testing positive for sibutramine while Tajikistan football player Khurshed Beknazarov was ejected after his doping test showed the presence of the banned stimulant methylhexaneamine.
(Editing by Greg Stutchbury/John O'Brien)
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