The Syndicate handed out the suspension after an emergency meeting on Monday evening.
Vice Chancellor AAMS Arefin Siddique said the university will launch an enquiry into the allegations.
The VC said the Syndicate would give the teacher a notice asking why he should not be removed permanently.
Prof Islam was confined inside his office all day by students. Some students also protested in front of the Senate building while the meeting was going on.
They allege that Islam called a final-year female student to his home on Saturday and harassed her.
The student filed a complaint to the vice chancellor and acting proctor on Sunday along with purported evidence in the form of an audio recording.
In the afternoon the chairman was rescued by acting Proctor Amzad Ali and immediately wrote to the registrar asking to be relieved from academic and administrative activities "for the sake of fair investigation".
He later spoke to reporters, claiming he was the victim of a 'conspiracy'.
But Amzad Ali said the audio recording and testimony from other students pointed to the man being guilty.