The State Council announced through its human resources ministry that Xiao Tian was removed from the position as a vice minister of the General Administration of Sport of China.
Xiao was placed under investigation for possible corruption in June.
Xiao was a vice chairman of China's national Olympic committee. He was also elected last September as one of three vice presidents of FIBA, basketball's world governing body.
Beijing is competing against Almaty, Kazakhstan, for the right to host the 2022 Games. The IOC vote will be held on July 31 in Kuala Lumpur, Malaysia.
More From This Section
"Beijing 2022's focus remains on our bid, and efforts to present the best possible plan," Wang said in a statement then.
Since taking power in late 2012, Chinese President Xi Jinping has launched a broad-based campaign against corruption among bureaucrats and officials in state industry.
In its quest for Olympic success, China has lavished funds on its system of sports schools, leagues and playing facilities, opening up ample room for corruption.