Disgraced Conservative MP has been suspended from the House of Commons for ten days.
MPs have approved the Commons standards and privileges committee's report into Mr Conway, who was found to have overpaid his son Freddie for work as a parliamentary researcher.
The committee recommended the MP for Old Bexley and Sidcup should be suspended from parliament for ten sitting days. He has also been ordered to return £13,161 paid to his youngest son from public funds.
MPs agreed the punishment without a vote.
Mr Conway yesterday announced he would not seek re-election at the next general election. The MP had already been effectively suspended from the Conservative parliamentary party after David Cameron withdrew the party whip.
The Tory leader was accused of dithering over Mr Conway, taking 24 hours to withdraw the whip.
Mr Cameron had at first said the committee's recommended punishment was "appropriate".
Mr Conway's fall from grace began when the standards committee found Freddie Conway had been paid "excessively" for work no-one could prove had in fact been carried out.
The committee concluded it was "at the least, an improper use of parliamentary allowances: at worst, it was a serious diversion of public funds".
On Tuesday it emerged Mr Conway's second son Henry had been paid through a similar arrangement.
Scotland Yard yesterday confirmed it had been asked to look at the payments, following a complaint by Duncan Borrowman, who will fight Mr Conway's seat for the Liberal Democrats.
The Daily Mail now claims a close friend of Mr Conway's second son Henry has also been employed as a Commons researcher.
Michael Pratte was reportedly paid £11,500.08 for working 17.5 hours a week. He is also studying for a postgraduate degree at the London School of Economics.
The Conservatives are now reportedly considering a ban on MPs employing children in a bid to avoid further sleaze allegations.