The University took the decision following a viral video where the student was seen hugging her boyfriend.
According to the university's spokesperson, Ahmed Zarie, the school took the decision because she had presented a "bad image" of Al-Azhar University, which strictly segregates the genders.
He said hugging between unmarried men and women violates "the values and principles of society".
Although, the video was not filmed in Al-Azhar but at Mansoura university campus located in the northern part of Egypt, the man in the video could also face disciplinary action.
AFP reports that Mansoura University spokesperson said that the school's disciplinary council was due to meet on Monday to decide on the boy's quantum of punishment.