Sidhu's resignation from the board is effective from January 1.
"... Consequent upon relinquishing charge of AS & FA, DIPP (Department of Industrial Policy and Promotion) to assume the charge of Secretary, Department of Public Enterprises, Kusumjit Sidhu has resigned from the position of part-time official director," the company said in a regulatory filing.
There are now seven members in the board, including chairman and managing director B P Rao.
Rao has received a two-year extension.
There are four functional directors -- P K Bajpai (Finance Director), R Krishnan (HR Director), W V K Krishna Shankar (IS&P Director) and Atul Sobti (Power Director).
BHEL is a leading power equipment manufacturer.