Gurgaon district council chairperson Kavita Yadav was sacked from her post Monday by a no-confidence motion moved by councillors, said an official.
Seven out of the 10 district councillors voted against her.
The no-confidence motion was moved in the presence of Deputy Commissioner Shekhar Vidyarthi and District Development and Panchayat Officer Alka Chaudhary.
All the seven councillors had given a written complaint against Yadav June 26, alleging she had misused their funds including Rs.10 lakh each issued by the Haryana chief minister for the development of their wards.
"She was busy in property-dealing rather than focusing on development work," they alleged.
The then deputy commissioner P.C. Meena had set July 29 for voting on the motion.
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Yadav was elected chairperson in July 2010, securing nine votes out of 10.
The new chairperson, a post which is reserved for woman, will be elected soon, said an official spokesperson.