One of China's most prominent politicians, Bo Xilai, has been removed as Communist Party boss in the city of Chongqing following a scandal.
The 62-year-old was a strong contender for promotion to China's top leadership in party changes due later this year.
However, a scandal erupted when his former chief of police spent a day at a United States consulate last month.
The flamboyant Bo Xilai is the nearest thing China has to a Western-style politician, correspondents say.
Vice-Premier Zhang Dejiang will replace him, state news agency Xinhua said.
Mr Bo became a national figure after a high-profile campaign against organised crime in the huge inland city of Chongqing - and his efforts to revive the socialist culture of Chairman Mao.
With his career apparently over, questions will be raised about China's once-in-a-decade leadership change plans starting later this year, the BBC's Martin Patience in Beijing says.
Mr Bo had been expected to join the standing committee of the politburo - a nine-member body - which effectively runs China.
Breaking silence
Bo Xilai's removal comes just a day after the end of the country's annual parliamentary session, the National People's Congress (NPC), where his absence from a meeting sparked speculation 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.
Mr Bo said he had not imagined Mr Wang would run off.
"I feel like I put my trust in the wrong person," he added, speaking at a meeting of Chongqing delegates.
Mr Wang has also been sacked from his job as deputy mayor of Chongqing, said another Xinhua report following the earlier announcement on Mr Bo's removal.
Mr Wang's visit to the US consulate in the city of Chengdu sparked rumours that he had intended to defect. State media reported that he was on vacation to recuperate from stress.
Mr Wang, who led the *****down on organised crime in Chongqing that propelled both him and his boss into the limelight, was later placed under police investigation for the incident.
'Western-style' politician
Premier Wen Jiabao, answering a question at a news conference on Wednesday at the closing of the NPC session, said ''progress'' had been made in the investigations, but did not reveal details.
He said local authorities must ''seriously'' reflect and learn from the incident and that Beijing regarded this ''very seriously''.
Reactions to the brief announcement of Mr Bo's removal from his post in state media have been swift. The news spread quickly, prompting thousands of posts on the Sina Weibo microblogging site on Thursday morning.
"Swift and thorough! The ultra-leftish stronghold has finally come to an end. It's a big fortune for China, a big fortune for the people!" posted a writer for Xinhua.com, Wang Ruogu.
"Bo Xilai might have his personal mistakes, what he has been pushing for might be problematic... but he has truly done a lot of great things for the people,'' said another comment by a former journalist.
Like China's leader-in-waiting Xi Jinping, Bo Xilai is the son of a famous communist hero, but he has gone on to forge his own unique public personality. Correspondents say the suave and charismatic Mr Bo seems at home in front of the cameras and appears to enjoy pushing his policies in public.
He ran the big coastal city of Dalian and then became commerce minister, before moving to the post in Chongqing, a sprawling city in western China.