The blood profile of the multiple Olympic and world champion showed abnormal variations in tests, the ISU found following a two-day hearing.
The variations showed up in particular following the World Allround Championships in February and Pechstein, 37, will now be banned until February 9, 2011 - but through her lawyer she said she will appeal against the suspension to the Court of Arbitration for Sport.
"Pechstein rejects the accusation of blood doping," her lawyer, Marius Breucker, said in a joint statement with German Speedskating Federation chairman Gerd Heinze.
"She has been tested intensively in competition and in training these past years without any doping substance being found," the statement added.
"During the procedure before the ISU experts judged the data unreliable owing to patent errors" and, during the tests, "only the reticulocyte (immature red blood cells) levels were abnormally high. The other blood parameters, such as haemoglobin and the hematocritic levels were normal," the statement maintained.
"Illness or blood abnormalities are possible explanations for an abnormally high reticulocyte reading. Pechstein proposes to submit herself to tests for these possible anomalies."
Breucker and Heinze added she would also agree to "several weeks of surveillance with blood and EPO testing in order to prove her innocence."
And the statement concluded: "This is as far as we are aware the first time there has been a suspension founded on indirect proof, that of a sole blood value. No banned substance has been found."
As well as handing down the ban the ISU stripped Pechstein of her fifth and fourth-placed finishes in the 500m and 3,000m races at the World Allround event.
Following that event she missed the March world championships in Canada.
Vancouver would have been a sixth straight Winter Olympics for the German, who has claimed five Olympic golds and six world championship titles.