World football's governing body has recommended that Borbely, along with the ethics judge who helped bring down Sepp Blatter, Hans-Joachim Eckert, not be re-elected at the FIFA Congress which takes place on May 11 in the Gulf.
Borbely also said there were "several hundred cases" of corruption pending.
"The removal means nothing else but the end of the reform process," said Borbely.
"The ethics commission is the key institution of the FIFA reforms.
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"As it seems now, the work of the ethics committee was inconvenient for functionaries, for FIFA officials.
"The removal of the ethics committee is not in FIFA's best interests... And it's a setback for the fight against corruption," said Borbely.
The dramatic recommendation was taken by the all-powerful FIFA Council on Tuesday.
The decision not to re-elect Eckert and Borbely comes as they have both served their four-year terms.
The Council recommended replacing Eckert with Vassilios Skouris of Greece, a former president of the European Court of Justice.
Skouris served as president on the ECJ from 2003 until 2015.
The decision is set to be ratified by FIFA at its annual Congress, which convenes in Bahrain on Thursday.
- Personal motive -
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The decision is controversial as critics have accused FIFA president Gianni Infantino of having a personal motive to replace Eckert and Borbely, as an ethics investigation was launched against him last year.
Eckert was the judge who opened proceedings against Blatter and Michel Platini in November 2015.
"It's not a great day for FIFA," Eckert told the same hastily-arranged press conference, held in a downtown hotel in Manama.
"The loser is soccer, not me."
The investigators said they have still not been officially told about their removal and only found out via their "mobile phones" when they landed in Bahrain on Tuesday evening.
One official joked that not being informed was "classy".
"I would like to have an explanation," said Eckert.
Following Tuesday's decision, FIFA members were tight- lipped but one Council official said: "Congress members felt that FIFA and the Ethics Commission needed freshening up."
However, FIFA's decision threatens to overshadow its Congress and critics will argus that it calls into question the reform agenda set by the president, who was elected last year after football's governing body was engulfed by corruption scandals.