The Communist Party boss of China's southwestern city of Chongqing has been removed from his post.
Bo Xilai's sacking follows an incident in February when one of his most senior aides temporarily took refuge in an American mission.
China's Xinhua news agency says the Vice Premier Zhang Dejiang will replace Mr Bo.
The 62-year-old was a strong contender for promotion to China's top rungs when the party changes its leadership later this year.
However, a scandal erupted when his former chief of police spent a day at a United States consulate last month.
The move comes just a day after the end of the country's annual parliamentary session, the National People's Congress, where Mr Bo's absence from a meeting sparked speculations about his future.
After a long silence, he spoke last week about the incident involving ex-police chief Wang Lijun, answering questions from journalists at a meeting on the sidelines of the NPC.
He said he had not imagined Mr Wang would run off. It came suddenly, Mr Bo said.