England forward Grewcock was cited by match commissioner Willem Venter for an alleged bite on New Zealand hooker Keven Mealamu during Saturday's 21-3 first Test defeat against the All Blacks.
Grewcock was suspended following a marathon disciplinary hearing that lasted all day in Christchurch and is now out of the tour.
"I am obviously very disappointed at the outcome of the hearing," Grewcock said.
"I do not agree with the decision, because as I argued to the hearing, I did not bite the player at all.
"But I have to accept the decision and that means for me the tour is over.
"I have decided therefore that I will return home as soon as I can. I think that is the best course of action for me, and for the tour.
"I now hope that the rest of the Lions squad go on to win the next two tests. I'm just sad that they will have to do it without me, and wish them all the very best for the remaining matches on the tour."
Lions head coach Sir Clive Woodward now finds himself without the services of a leading player and is now set to summon a replacement.
The International Rugby Board's judicial officer, Terry Willis, heard evidence from Mealamu and All Black winger Sitiveni Sivivatu plus Grewcock and Lions tour manager Bill Beaumont.
Referee Joel Jutge, touch judge Stuart Dickinson and All Blacks doctor Graham Paterson submitted written reports while Willis also viewed a videotape and heard an audio tape of Mealamu's complaints to the match officials.
After examining all the evidence Willis accepted: "Mealamu's fingers inadvertently entered Grewcock's mouth at the breakdown but rather than removing the fingers in a more conventional way, Grewcock bit Mealamu's right ring finger, and accordingly he found that the player was guilty of biting."
Willis heard defence for Grewcock that despite his previous disciplinary problems, he had never been cited for biting before.
But Grewcock, under IRB regulation 17, was given a two-month suspension which expires on August 26.
Grewcock's suspension is another huge blow to the Lions, who have already lost a number of key senior figures to injury.
Lawrence Dallaglio fractured his ankle 21 minutes into the Lions' first tour game against Bay of Plenty.
Iain Balshaw, Malcolm O'Kelly and Simon Taylor were all ruled out without playing a game.
In Saturday's Test, captain Brian O'Driscoll severely dislocated his shoulder after less than 90 seconds and Richard Hill twisted his knee.
On top of that, Tom Shanklin suffered a knee injury in training and all three will not play a part in the remainder of this tour.
Woodward lodged an official complaint against Mealamu and All Blacks captain Tana Umaga for what he called a "double spear-tackle" that ended O'Driscoll's tour.
Woodward's complaint was rejected by the independent citing officer Willem Venter but the South African did cite Grewcock for an incident 63 minutes into the game - only six minutes after he had come on as a second-half replacement.