"BJD president Naveen Patnaik has been pleased to relieve Dr Damodar Rout from the post of vice-president, Biju Janata Dal," Odisha Minister and BJD vice-president Usha Devi said in a statement.
Patnaik also removed Rout from the responsibility of the party's observer in Dhenkanal district with immediate effect, Devi said.
The chief minister has yesterday dropped Rout, who was Agriculture minister over his anti-Brahmin remarks at a public meeting in Malkangiri district.
"The Chief Minister's stand is very clear. Yesterday, he had dismissed Rout from the ministry in the capacity as the Chief Minister. Today, he removed him from party posts as party chief. The action has followed after his irresponsible remarks against a community," BJD spokesman Prashant Nanda told reporters.
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"I was elected by the people to serve them and not to become a minister. I will continue to work for the people as an MLA," Rout said.
Rout also clarified that he was dismissed as he did not resign when the chief minister wanted yesterday afternoon.
Opposition BJP, however, dubbed Patnaik's action as a political stunt.
"BJD believes in caste and communal politics. Chief Minister Naveen Patnaik has dismissed Damodar Rout to mislead people with some other motive," BJP spokesperson Sajjan Sharma had said earlier in the day.