Governor highlighted suspicions of massive corruption
Nigerian president Goodluck Jonathan suspended the central bank governor, Lamido Sanusi, on 20 February.
In a statement the government said that Sanusi's tenure had been "characterised by various acts of financial recklessness" and misconduct.
Sanusi had become increasingly vocal in his criticism of the government's stance on tackling widespread corruption in Nigeria. He recently provided evidence to parliament, revealing his suspicion of massive fraud at state oil firm Nigeria National Petroleum Corporation (NNPC).
He claimed that the NNPC had failed to pay $20 billion that it owed the government, a charge repeatedly denied by NNPC.
Sanusi's dismissal has rattled investor confidence in Africa's second biggest economy and puts pressure on Jonathan one year ahead of elections in February 2015.
Sanusi, who was due to complete his term in June, has been replaced temporarily by deputy governor Sarah Alade, who has held senior management posts at the Central Bank of Nigeria for over 20 years.
Jonathan has nominated Godwin Emefiele, the managing director of Nigeria's largest bank Zenith, to become the next central bank governor. If Emefiele's appointment is approved by the senate he will start in June.