Opposition leader Sussan Ley has sacked Jacinta Nampijinpa Price from her frontbench after the senator refused to apologise for her comments about Indian migrants.
Ley announced the decision on Wednesday night, saying Price had failed to "uphold the standards" she had set as leader.
"Despite being given sufficient time and space to do so, Senator Nampijinpa Price failed to apologise for remarks which have caused Australians of Indian heritage significant hurt," Ley said.
"She also refused to provide confidence in my leadership of the Liberal Party and sadly, that has made her position untenable in my shadow ministry."
Price said she had spoken to Ley and accepted her decision.
"I took the opportunity to express to the leader my disappointment that some colleagues disregarded the key point I was making about the damaging impacts of mass migration," she said in a statement.
"I never intended to be disparaging towards our Indian community. And I wish no ill-will whatsoever to the Indian community — or any other migrant group."
She said the saga had been a "disappointing episode" for the Liberal party and she regretted not being clearer about her remarks.
"My concern is not migration itself — it’s the magnitude of migration," she said.
There had been growing calls for Price, who held the defence industry portfolio in the shadow ministry, to apologise for her remarks about Indian migrants.
In an interview with the ABC's Background Briefing program last week, Price claimed the federal government had a "focus" on bringing in migrants "from particular countries over others", before singling out the Indian community.
Ley's sacking of Price comes after mounting criticism over the senator's remarks, with some of her Coalition colleagues distancing themselves from them.
Liberal frontbencher Alex Hawke said Price should apologise, while Julian Leeser offered an apology to the Indian community on her behalf.
On Wednesday morning, Foreign Minister Penny Wong confirmed Indian officials raised concerns with the federal government following rhetoric at anti-immigration protests where members of the Indian community were singled out.
"We've communicated with them, not at my level, but at official level, and they've seen the very important responses from the government," she said.
Wong emphasised the views shared at the anti-immigration protests did not reflect the broader community.
"Those protests didn't represent Australia. I don't think Australian values are values of division," she said.
