The AU statement, issued on Friday, followed a meeting of the Peace and Security Council in Addis Ababa, Ethiopia, Al Jazeera reported on Saturday.
Soldiers from the elite presidential guard (RSP) stormed into a cabinet meeting on Wednesday and abducted President Michel Kafando and Isaac Zida, the prime minister, disrupting a transition period due to end with polls next month.
General Gilbert Diendere, a former spy chief and close ally of Blaise Compaore, the former long-term president, was named junta head the next day.
The AU gave coup leaders 96 hours, or until September 22, to restore the transitional government or face travel bans and asset freezes.
"Council decides to suspend, with immediate effect, the participation of Burkina Faso in all AU activities," the statement said, adding that members of the RSP linked to the kidnappings would be held legally accountable for their actions.
Burkina Faso, whose citizens toppled Compaore last year as he sought to extend his 27-year rule, had been seen as a model by pro-democracy campaigners across sub-Saharan Africa.
The coup has been condemned by the US, former colonial power France and the UN.