The charge relates to a race two years ago at Moonee Valley in Melbourne in which Oliver allegedly breached the rules by betting Aus$10,000 (US$10,400) via a third party on eventual winner and favourite Miss Octopussy.
Oliver's horse, second favourite Europa Point, finished sixth.
The Australian two-time Melbourne Cup winner was also charged with using a mobile phone in the jockeys' room prior to the race, which is prohibited.
Jockeys are banned from betting on any horse, while betting on a horse in the same race is one of the "gravest breaches" of Australian racing laws.
Racing Victoria said the 40-year-old had been suspended after admitting the offences.
He faces a ban of up to 12 months which could place his career in jeopardy.
"Racing Victoria stewards have issued two charges against licensed jockey Damien Oliver after he made admissions yesterday that he bet on a rival horse," the organisation said on its website.
"On the basis of those admissions and the subsequent charges, Mr Oliver has been stood down from riding... pending a hearing before a stewards' panel on Tuesday, 20 November 2012."
The scandal blew up in the press on the morning of this year's Melbourne Cup, overshadowing the Aus$6 million ($6.2 million) showpiece event. Oliver was one of the favourites to win but finished 11th.
Racing Victoria chief executive Rob Hines denied the organisation had been slow to act, saying it only received Oliver's admission of guilt 24 hours before laying the charges.
He rejected media reports over the past two weeks that Oliver made formal admissions in the case much earlier.
"It has been alleged in various news reports that Damien Oliver had confessed to the illegal bet on Miss Octopussy some weeks ago," Hines said.
"Following a number of interviews ... a signed statement was received yesterday from Mr Oliver which contained an admission which enabled the stewards to lay the charges and stand down Mr Oliver pending the inquiry."
Before that, insufficient evidence was available to stewards to either lay charges or suspend the jockey, he added.