Jolly's suspension begins immediately and will continue through at least the 2010 season. He will be eligible to apply for reinstatement after the Super Bowl.
Jolly is facing drug charges in Houston after his July 2008 arrest outside a club for possession of at least 200 grams of codeine. If convicted, Jolly faces up to 20 years in prison.
"Johnny is a good player that loves everything about the game of football," Packers general manager Ted Thompson said in a statement. "We appreciate the contributions he has made to the Packers the past four seasons. His focus and priorities now lie elsewhere -- our thoughts are with him during this difficult personal time."
The Packers said team officials would have no further comment.
It's a significant blow to a team that will go into the 2010 season expected to make a run at the playoffs and perhaps even the Super Bowl. A defensive end in Dom Capers' 3-4 scheme, Jolly played a key role as the Packers allowed a league-low 83.3 yards rushing per game.
Perhaps anticipating the possibility of losing Jolly to a suspension, the Packers used a second-round draft pick on Purdue defensive lineman Mike Neal in April.
Jolly, 27, was a sixth-round draft pick in 2006 and worked his way into a starting role the past two seasons.
A restricted free agent, Jolly signed before an offseason deadline the would have allowed the team to reduce the amount of its tender offer.
But Packers coach Mike McCarthy excused Jolly from the team's minicamp in June to deal with his off-field problems.
"There's a lot going on, and he needs to focus and make sure he has everything in line," McCarthy said last month. "These decisions that are going to be made legally will affect every aspect of his life, most importantly his personal life and then his professional life."
Fellow defensive lineman Ryan Pickett said last month that he expects Jolly, a friend, to learn from the experience.
"If this stuff doesn't cause you to change, what will?" Pickett said. "All this stuff he's going through -- you're missing practice, you can't be around your teammates, that'll make you feel isolated from the team. So if this stuff doesn't change, then that's an issue. I'm expecting him to be changed by this experience, definitely."
Already facing a prolonged trial with potentially serious consequences, Jolly got in more trouble in May after flyers appeared advertising a party he allegedly hosted at a Houston nightclub.
A judge placed tougher restrictions for his bond, ordering him to submit a hair sample for additional drug testing, adhere to a 6 p.m. to 6 a.m. curfew, be evaluated by a drug counselor and to not attend "clubs or any other establishment where drugs or alcohol are used."
"I had better not see any more flyers like this," state District Judge Mike Anderson told Jolly, holding up the rectangular, color glossy flyer that had a photograph of Jolly wearing a blue polo shirt, a cap on backward and a large gold watch next to a headshot of Jolly in his Packers' helmet.
"Yes sir," Jolly responded.
Jolly was arrested after 1 a.m. on July 8, 2008, in the parking lot of a Houston club known for drug and gun use.
A police gang unit pulled his car over because of excessive noise coming from amplified bass music. Jolly was arrested on a charge of possession of a controlled substance after police "smelled the strong odor of codeine" in cups in the vehicle, according to the police report. Lab tests subsequently confirmed the codeine.
The charges against Jolly were dropped in July 2009 so lab technicians could become proficient with a new piece of equipment that measures codeine. He was reindicted in December 2009.