Kim, a star in the United States' Ryder Cup victory over Europe two months ago, accidentally hit a sprinkler head as he tapped his driver on the ground while walking down the seventh fairway.
'I wasn't angry or anything, just walking down the fairway,' Kim said. 'The toe hit the sprinkler, hit the top of the sprinkler, and I looked at it and it looked a little bit different. But I wasn't sure and I put it in my bag.'
At the eighth, he hit his first drive only 150 yards, and out of bounds. He then hit a second provisional shot - also poorly. He took a triple-bogey 8 on the hole and played two more before he found a rules official, who told him he must disqualify himself for playing with an altered club.
Kim was disqualified under rule 4-3b, said Andy McFee, European tour referee.
Kim had an 8-over 44 on the front nine, and parred the 10th hole. He entered the third round at 5 under - five strokes behind the leaders - with rounds of 66-73.
The HSBC Champions will be completed Monday after a delay caused by a rain washout on Friday and more rain on Saturday.
'I was pretty shocked,' Kim said. 'But you know, the rules are the rules and I have no problem with that.'
In the last few weeks, Kim said he badly sprained his right ankle - falling down stairs at a friend's home - and also bruised his jaw while horseback riding.
Kim said he's played little golf in the last three weeks and has lived on a diet of noodles, unable to chew with the sore jaw.