Olbermann acknowledged to NBC that he donated $2,400 apiece to the campaigns of Kentucky Senate candidate Jack Conway and Arizona Reps. Raul Grivalva and Gabrielle Giffords.
NBC News prohibits its employees from working on, or donating to, political campaigns unless a special exception is granted by the news division president — effectively a ban. Olbermann's bosses did not find out about the donations until after they were made. The website Politico first reported the donations.
"I became aware of Keith's political contributions late last night," Phil Griffin, MSNBC's chief executive, said Friday. "Mindful of NBC News policy and standards, I have suspended him indefinitely without pay."
Olbermann was not immediately available for comment.
His "Countdown" show, which airs at 8 p.m. ET, is MSNBC's most popular program. His on-the-air transformation from the host of a straight news program to a liberal commentator led the network itself to go in the same direction, filling its prime-time lineup with left-leaning hosts and doing better in the ratings than anytime since its 1996 launch.
The rise in opinionated cable news programming has called into question whether the traditional rules of news organizations to preserve the appearance of impartiality should apply to people who have their jobs in part because of a clear point of view.
Sean Hannity, a conservative radio talk show host with a popular hour on Fox News Channel each weeknight, donated $2,400 to the congressional campaign of New York Republican John Gomez in May. In August, he donated $5,000 to the Minnesota-based Michelpac, or Many Individual Conservatives Helping Elect Leaders Everywhere, according to the Federal Election Commission.
Fox's parent company, News Corp., gave $1 million this summer to the Republican Governor's Association, which helps elect GOP gubernatorial candidates nationally.
When Fox host Neil Cavuto donated $1,000 to President George W. Bush in 2002, Fox executive John Moody told The Washington Post, "I wish he hadn't."
MSNBC's own Joe Scarborough, who hosts the "Morning Joe" program, is listed in campaign records as donating $4,200 in 2006 to Derrick Kitts, a failed Republican congressional candidate.
Grijalva was asked to be a guest on Olbermann's show because the congressman's office in Tucson had received a suspicious envelope in the mail, spokesman Adam Sarvana said. Grijalva did not ask for a donation and Olbermann did not say he was giving one.
"I assume that Olbermann decides on his own who to give his money to," said Sarvana, adding that the campaign was surprised when the check arrived.
Olbermann was a co-anchor of MSNBC's election coverage this week. The network's performance drew some criticism, particularly with Chris Matthews' contentious interviews with Republican Reps. Michele Bachmann and Marsha Blackburn.
Olbermann was seen laughing following Matthews' conversation with Bachmann. Matthews had criticized the congresswoman for failing to answer his questions.
"Are you hypnotized tonight?" Matthews said. "Has someone hypnotized you? Because no matter what I ask you, you give the same answer."
Comedy Central's Jon Stewart, interviewing Fox's Chris Wallace the day after election day, said MSNBC was like "double-A ball" in comparison to Fox.
"You can't defeat Fox by becoming what they say you are," Stewart said. "The only way you can defeat them is by an earned credibility, not an earned partisanship. They're making a mistake by becoming an equivalent to Fox rather than a brand new journalistic organization."
There has been discomfort in the past at NBC News over the roles of Matthews and Olbermann on newsy nights. For part of the 2008 campaign, the two men anchored MSNBC's prime-time political coverage, but when the general election campaign started, they were replaced by David Gregory and given the role of commentators.
Chris Hayes will fill in for Olbermann on Friday's program, the network said.
Associated Press correspondent Bob Christie contributed to this report.