A senior from Washington, D.C., Austin had been suspended indefinitely since September 1 for violating team rules.
Austin was selected to the 2010 Preseason All-ACC team, and named to both the Outland Trophy and Bronko Nagurski Trophy watch lists.
He started 11 games at defensive tackle and earned second-team All-Atlantic Coast Conference honors in 2009 after posting 42 tackles, including six for losses and four sacks for 40 yards. He also forced one fumble, had one fumble recovery and broke up three passes.
"I want to apologize to the NCAA and the entire North Carolina Tar Heel community including my teammates, coaches, students and fans," Austin said in a statement. "I have let you all down and I am truly sorry.
"I deeply regret my actions and the embarrassment I brought to the university and to the football program. I will pay a severe price for my poor decisions by not being able to play my entire senior season.
"I want to thank everyone who has supported me throughout this investigation. The lessons I have learned during this process will guide me the rest of my life. I love my Carolina family and I will work my hardest to make you all proud of me."