The high-flying economist was made a Companion of the Order of the Bath (CB) in 2009.
But in March she and ex-husband Chris Huhne were both jailed for eight months for swapping speeding penalty points so he could avoid a driving ban.
Mr Huhne resigned from the Cabinet when he was charged with perverting the course of justice, and later quit as a Lib Dem MP and privy councillor.
An announcement published in the London Gazette read: “The Queen has directed that the appointment of Vicky, Mrs Pryce, to be a Member of the Civil Division of the Third Class, or Companion, of the Most Honourable Order of the Bath, dated June 13, 2009, shall be cancelled and annulled and that her name shall be erased from the Register of the said Order.”
Whitehall’s Forfeiture Committee, chaired by civil service head Sir Bob Kerslake, recommended the step after deciding the system would be brought into disrepute if she was allowed to keep the honour. The Prime Minister passed the advice on to the Queen, who gave final approval.
Ms Pryce received her CB in recognition of her contribution as head of the Government economic service.
She was released from prison in May with an electronic tag after serving two months for perverting the course of justice.
Ms Pryce, a regular pundit on television before her conviction, immediately declared that she was publishing a book on her experiences, with the title Prisonomics.