Angelo Tsirekas was on suspension following the release of an Independent Commission Against Corruption report in November.
His immediate dismissal from City of Canada Bay Council, in Sydney's inner west, was confirmed on Wednesday by Local Government Minister Ron Hoeniof.
The ICAC report found Mr Tsirekas received benefits from property developer I-Prosperity Group, including overseas flights and accommodation, worth at least $18,800, between 2015 and 2019.
In exchange, Mr Tsirekas, who was elected mayor in 2002, used his position to favour the company's interests affecting properties in Rhodes considered by council, according to the report.
The report found he was close friends with one of the company's employees, Joseph Chidiac, which he failed to disclose as a conflict of interest despite knowing he was required to.
"The immediate dismissal and disqualification of Mr Tsirekas is necessary to protect the public standing of the council, and local government generally," a statement from Mr Hoenig's office said.
In a statement after his suspension, Mr Tsirekas said his legal team was reviewing the findings and was of the view they were based on "errors of fact and law".
"The actions at the heart of the findings in respect of the Rhodes development have wrongly been attributed to me and City of Canada Bay Council, when in fact the responsibility for planning approval was solely within the control of the NSW government, not the council," the statement read.
Canada Bay deputy mayor Joseph Cordaro will continue to do Mr Tsirekas' role until a council meeting to vote for a new leader.
The potential prosecution of Mr Tsirekas has been submitted for review to the Director of Public Prosecutions.
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