A spokesman with Dalhousie University in Halifax said Tuesday that the school began looking into the matter after receiving a formal complaint from a university employee sometime within the last two weeks.
Brian Leadbetter wouldn't provide any details about the nature of the complaint, who filed it, where the incident occurred or who was involved, but said it was serious enough to warrant a suspension of the team's privileges.
"We do not tolerate behaviour that humiliates, disrespects or threatens anyone in the campus community ... and that's why we're moving ahead with this investigation," he said.
"There will always be isolated incidents of individuals crossing the lines of acceptable behaviour and that is certainly the case from our perspective in terms of the investigation we're moving forward with."
The school quietly posted a statement about the suspension on its website Friday, saying that due to the seriousness of the allegations it had stopped the club's funding and insurance under the Dalhousie Sport Club Handbook.
Leadbetter said that will remain in effect until the completion of the investigation, which could take up to 60 days according to the rules in its hazing policy.
During the investigation, the club will not be permitted to represent Dalhousie University in Rugby Nova Scotia's university league or book space on campus. Players also cannot wear university colours or uniforms.
The funding being held back pending the outcome of the investigation is about $4,000, which is used for team travel and other administrative costs.
The team was already on probation for misbehaviour, but Leadbetter wouldn't provide any details. He would only say that it was "an unrelated, non-hazing incident that occurred during a recent trip."
At the time the club, which has about 50 players on two teams, was told that any further misconduct would lead to the loss of its privileges.
Dalhousie University says it does not tolerate hazing in any form, according to a new policy adopted in April. Anyone involved in hazing could face disciplinary action, including removal from a team.
Athletes are also subject to the Sport Club Handbook, which says coaches and advisers are expect to ensure teams adhere to university policies "especially those related to hazing, alcohol and harassment."
Executives for sports teams are required to do online training on hazing and participate in education sessions on the policies in the club handbook. Leadbetter said the rugby executives participated in those.
No one from the rugby club was available to comment.
Lindsay Dowling of the Dalhousie Student Union said she was saddened to hear of this latest complaint, but didn't know the details of it.
It is not the first time the school has dealt with an alleged hazing incident involving one of its sports teams.
Last year, most of the women's varsity hockey team was suspended after the university investigated complaints of hazing at a private house party in September 2012. Dalhousie University said the party involved excessive drinking and intimidation.
Players, however, accused the university of overreacting, saying no one was harmed or forced to take part in any activity.
With all but the team's rookie players suspended, the team was forced to forfeit its season.
Follow @alison_auld on Twitter.