The decision was made on Thursday by the Rules of Procedure, Immunities and Institutional Affairs Committee of the PACE.
The committee concluded that they had accepted gifts and other monetary bribes from the Azerbaijan government to lobby on its behalf and present Azerbaijan in a positive light.
It decided that they should "be banned for life from entering the Council of Europe and the PACE" and participating in any activity of the Council of Europe, as reported by the French press agency AFP.
The decision was made on the basis of the corruption allegations revealed by the German NGO European Stability Initiative (ESI).
An independent investigation revealed that Jelinčič, the head of the National Party, received in July 2012 EUR 25,000 from a British company involved in the case dubbed "Azerbaijani Laundromat", a complex money-laundering operation.
The scandal, which was also dubbed by some media as "caviargate", broke out in January 2013, after the former members of the PACE were suspected of being bribed by the Azerbaijani government to vote against a report critical of the treatment of political prisoners. The report was rejected.
A source close to the Council of Europe has said that certain members of the PACE received caviar, carpets or paid stays in luxurious hotels the in return for their votes.
Jelinčič has failed to provide a written answer to the accusations as demanded by the investigators, and he did not answer a letter sent by the head of the committee.
He said in a response for the STA that he would "be hurt more if I was banned to enter the Dolenje Zbure wine growers' club", adding that it was a "completely ridiculous thing".
"These are death throes of an organisation that is not being taken seriously any more by almost half of normal EU member states," Jelinčič said, accusing the CoE of taking the right to encroach upon the sovereignty of member states about who would represent them in European institutions.
Asked whether he had received any other services, for example stays in luxurious hotels or caviar, he said that it was logical that he was sleeping in hotels, "as they don't sleep in tents in Azerbaijan".
Jelinčič said he had been in Azerbaijan many times and that he had acted in line with the truth, with what he had seen.
Asked why he did not respond to the allegations and accusations from the CoE, he said that he did respond to "two shameless letters". "They then announced that they had no remarks and that my case is clean".