The BEL took this decision at a meeting of its Board of Directors yesterday.
Nair, who was the driving force behind India's maiden moon mission Chandrayaan-I, was barred by the Centre in February from holding any government job or position.
"Government of India has removed G Madhavan Nair, Independent Director, from the board of the company," BEL informed the Bombay Stock Exchange.
A five-member team that probed the deal between ISRO's commercial arm Antrix Corporation and Devas Multimedia had concluded that Nair and three other scientists were responsible for the controversial contract.
The committee, chaired by former Central Vigilance Commissioner (CVC) Pratyush Sinha, had observed serious lapses of judgement on the part of various officials, and noted that in some cases the actions verged on the point of breach of public trust.