The Bayonne-bound scrum-half was involved in a late night altercation with bouncers outside a Cardiff McDonald's restaurant in the early hours of Tuesday morning.
Phillips, who is currently on holiday, has been told he is no-longer required to report to Welsh Rugby Union on Monday to begin his personal pre-World Cup training program.
No criminal proceedings have been brought but while the suspension is in operation further internal investigations will take place.
"The player has been suspended due to a clear breach of the standards which we expect to be maintained by someone involved in one of our national squads," said WRU Group Chief Executive Roger Lewis.
"Discipline and acceptable behaviour are issues which run to the core values of the Welsh Rugby Union and we cannot tolerate any compromise of those standards.
"Mike Phillips is an exceptional player, but there is irrefutable evidence of a prima face nature that he was engaged in behaviour which falls below the standards we set.
"It is vitally important that we send out a clear and unambiguous message to one and all concerning our views on matters of this sort.
"That message must be heard clearly by all players, coaches, administrators, volunteers, supporters and, of course, the parents and guardians of any child attracted to take part in the national sport of Wales.
"By taking decisive action now we are emphasising that this sort of incident is highly unusual in that the majority of people involved in Welsh rugby help us maintain the proud record we have for fair play and off the field courtesy.
"Our senior national squad players are highly visible because of the profile which accompanies the success of our national sport and it is made clear to them that they are the ambassadors we rely on to foster and sustain our image.
"An incredible amount of hard work is currently taking place as our players prepare for the Rugby World Cup in New Zealand and that effort must be recognised and supported by all involved.
"I am making my views public at this time because, as the nation anticipates our involvement in Rugby World Cup there is no room for any ambiguity in our reasoning.
"Rugby is part of the culture of our nation and we must do all in our power to ensure that the game remains a sport that everyone in Wales can be rightly proud of."
Former Lions assistant coach and current Wales head coach Warren Gatland agreed to the disciplinary measures. He has now called up Lloyd Williams, the son of 1977 tourist Brynmor.