Carlos Ghosn's sacking throws the future of the Nissan-Renault alliance into doubt.
Nissan board members voted unanimously to sack Carlos Ghosn as chairman on Thursday, a spectacular fall from grace for the once-revered boss who was stripped of the role while languishing in a Japanese jail.
Ghosn stands accused of under-reporting his income by millions of dollars and a host of other financial irregularities, alleged after a months-long internal Nissan probe following a whistleblower report.
His ouster as chairman represents an astonishing turnaround for the titan of the auto sector who revived the Japanese brand and forged an alliance with Renault and Mitsubishi Motors, which sold a combined 10.6 million cars last year - more than any other firm.
It also throws the future of the alliance into doubt, as Ghosn was the architect of the fractious tie-up - which employs 450,000 people globally - and the glue holding it together.
"After reviewing a detailed report of the internal investigation, the board voted unanimously ... to discharge Carlos Ghosn as chairman of the board," the statement said.
Nissan also stressed its "long-standing... partnership with Renault remains unchanged" and that "the mission is to minimise the potential impact and confusion on the day-to-day cooperation" between the firms.
Renault's board has so far stood by Ghosn - naming his deputy to handle day-to-day business - but the board of Mitsubishi Motors was reportedly set to meet on Monday to discuss his future.
Prosecutors intercepted the Brazil-born tycoon Monday as he landed in Tokyo on a private jet, accusing him and another executive Greg Kelly of understating the chairman's income by around $44 million between June 2011 and June 2015.
His fate as Nissan chairman appeared sealed just hours later as his hand-picked successor as CEO, Hiroto Saikawa launched an impassioned broadside at his former mentor, muttering about a "dark side" to the Ghosn era and urging his sacking.
Even after being jettisoned as chairman, Ghosn remains technically a member of the board as a full shareholders' meeting is required to remove him.
Nissan said it would study the creation of a "special committee" to take advice from a third party on improving its internal governance and executive pay.
'In good health'
Ghosn is being held custody in a Tokyo detention centre and has not been seen in public nor made any comments since his arrest.
He received a visit from Brazilian consul Joao de Mendonca on Thursday who told AFP that Ghosn "sounded very well, in good health".
However, his conditions are likely to be a far cry from what the millionaire businessman is used to. Inmates at the centre are typically allowed 30 minutes exercise per day and only two baths a week.
Ties and strings are removed to prevent suicide attempts and former guards and lawyers said Ghosn was almost certain to be held in a cramped cell on his own.
On Wednesday, prosecutors successfully applied to extend his custody for an additional 10 days as they stepped up their questioning.
Deputy chief prosecutor Shin Kukimoto said that the type of crime Ghosn is accused of is "one of the most serious types of crime" under Japan's Financial Instruments Act and Ghosn could face a 10-million-yen fine and/or a 10-year prison sentence.
Under the law, companies themselves can also be held accountable for the falsified documents, Kukimoto said, following reports that prosecutors believe Nissan also has a case to answer.
The Kyodo news agency in Japan also reported Thursday that Nissan had paid $100,000 a year since 2002 to Ghosn's sister who had no record of doing advisory work for the group.
Public broadcaster NHK has reported that Nissan paid "huge sums" to provide Ghosn with luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam "without any legitimate business reason".
According to the Financial Times, Ghosn's fall from grace came as he was working on a full-blown merger of Nissan and Renault.
This was opposed by executives in the Japanese firm that has ended up being the most profitable player in the partnership and the FT said Ghosn's departure could be used as a pretext to rebalance the alliance in Nissan's favour.
Governments in Paris and Tokyo have been scrambling to contain the fallout from the arrest, with President Emmanuel Macron saying France would be "extremely vigilant" about the stability of Renault and the alliance.
In a sign of the political sensitivity of the case, Japanese Industry Minister Hiroshige Seko flew into Paris for a meeting with French Finance Minister Bruno Le Maire on Thursday.
Analysts said that despite clear tensions between the two firms headquartered 10,000 kilometres apart, neither company has the financial might alone to make the heavy investments in electric vehicles considered to be the industry's future.
"It would be like a couple divorcing after 20 years - it would be complicated, very expensive and not easy to do," said Gaetan Toulemonde, an analyst at Deutsche Bank.
"Honestly, I don't know if it's even possible."