The dismissal means that he will not get any benefits like pension and will not be entitled to use Army rank or any privilege attached with military service.
Prakash is the senior-most officer to have been awarded this punishment by the Army.
The Army Chief confirmed the sentence awarded to the former Military Secretary by a General Court Martial (GCM) in December last year.
The decision was taken by Gen V K Singh on May 21, ten days before his retirement from service, sources told PTI here.
Commenting on the development, Prakash said, "I am considering various options available under the service rules and legal remedies to protest against the decision taken by the Army Chief."
In recent interviews, the Army Chief has also blamed the former Military Secretary for raking up the age issue by filing RTIs.
Prakash was held guilty of misusing his position under Section 45 (conduct unbecoming of his position as an officer) and Section 52 (intent to defraud) of the Army Act by the General Court Martial at 51 sub-area of the Army station at Narengi in Guwahati. (More)