Highly-placed sources said the decision came after hours of deliberations at a special Commission meeting convened this evening which was attended by Chief Election Commissioner V S Sampath and Election Commissioners H S Brahma and Nasim Zaidi.
The poll body had received complaints against Saini, with the Punjab Congress chapter openly levelling allegations of bias against him for favouring the SAD-BJP regime in the state.
Arora, who replaces Saini, is at present DG, Vigilance Department in the state police. Both Saini and Arora are from 1982 IPS batch.
His request has since been accepted by the Commission.
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The Commission had earlier sought a three-member panel of officers from the state government for replacing Saini. The officials in the panel were Punjab DG Home Guard G D Pandey, DG, Security Sanjiv Gupta and Arora.
The state goes to polls on April 30.
Congress and other parties had demanded removal of Saini ahead of the Lok Sabha polls based on the number of complaints pending against him. They had sought his removal to ensure a free, fair and peaceful polls.
The EC had earlier transferred a number of other officers.
Saini is not the first top police officer in Punjab to be removed ahead of elections, as the former DGP S S Virk was removed during the 2007 Assembly polls in the state.