Lieberman's colleagues in the Democratic caucus voted 42-13 Tuesday on a resolution condemning statements made by Lieberman during the campaign but allowing him to continue to chair the Homeland Security Committee, the Associated Press reported.
Lieberman will lose a subcommittee chair on the Environment and Public Works panel, a much lighter punishment.
After the closed-door, four-hour meeting, Majority Leader Harry Reid, D-Nev., said he was angered by Lieberman's actions during the campaign but that "we're looking forward, we're not looking back."
"Is this a time when we walk out of here and say, 'Boy, did we get even?"' Reid told reporters.
"This is the beginning of a new chapter, and I know that my colleagues in the Senate Democratic Caucus were moved not only by the kind words that Senator Reid said about my longtime record, but by the appeal from President-elect Obama himself that the nation now unite to confront our very serious problems," Lieberman said after the vote.
Lieberman's position had gained traction since President-elect Barack Obama signaled to Democratic leaders that he was not interested in punishing Lieberman for boosting McCain and criticizing Obama during the long campaign, the AP reported.
Democratic leaders had feared that Lieberman, who routinely votes with the Democrats in the current closely held Senate, could decide to caucus with the Republicans if he lost the chairmanship post. With razor-thin races in Minnesota, Alaska and Georgia still to be decided from this year's election, losing Lieberman's vote could have quashed Democrats' faint hopes of gaining a filibuster-proof majority of 60 seats.
Lieberman, who was Democratic presidential nominee Al Gore's running mate in 2000, was re-elected in 2006 as an independent after losing his state's Democratic primary.
During the presidential campaign, Lieberman threw full support to McCain's White House bid -- including taking the unusual step of speaking at the Republican convention in St. Paul, Minn., and publicly questioning Obama's credentials for the nation's top job.
"There are some (statements) that I made that I wish I had not," Lieberman told reporters. "In the heat of campaigns, that happens to all of us, but I regret that. And now it's time to move on."
Some, like Iowan Tom Harkin, still harbor hard feelings for statements Lieberman made during the campaign. Harkin took particular offense when Lieberman said a vote against funding the war in Iraq without a deadline for a troop withdrawal meant Obama had voted to cut off funding for troops in harm's way.
"That's outrageous what he said," Harkin said.
Some senators feel that one requirement to be installed in a leadership position is party loyalty.
"To reward Senator Lieberman with a major committee chairmanship would be a slap in the face of millions of Americans who worked tirelessly for Barack Obama and who want to see real change in our country," Sen. Bernie Sanders, I-Vt., said in a statement last week. "Appointing someone to a major post who led the opposition to everything we are fighting for is not 'change we can believe in."'