At the time of the incident, Rice had been serving a suspension which caused him to miss the final six games of the 2011-12 campaign. He also served a three-game suspension at the beginning of the season for violating team rules.
According to the Atlanta Journal-Constitution, the police report on last week's incident says Rice was a passenger in an SUV leaving a midtown lounge that was stopped after officers responded to a call of shots fired.
Graduate student manager London Warren, the driver, was charged with DUI and Rice was charged with permitting unlawful operation. Another passenger who was not associated with the team was charged with discharge of a weapon while under the influence after he admitted he fired a shot from a 9-millimeter pistol.
Warren has also been dismissed from the team.
"It's an honor and a privilege to represent Georgia Tech and be a part of this basketball program," said head coach Brian Gregory. "There are certain standards that have to be met both on and off the court, and there has to be accountability when those standards aren't met. I'm disappointed that we have to take this action."
Rice, the son of the former NBA star, led the team in scoring and rebounding but played only 21 games because of the two suspensions. The junior will remain enrolled at Georgia Tech and will be allowed to complete his academic requirements for the spring semester.