In a letter carried by the official news agency IRNA, hard-line Iranian President Mahmoud Ahmadinejad dismissed Kazem Vaziri-Hamaneh from the top portfolio.
No reason was given for Vaziri-Hamanehs forced departure.
Gholam-Hossein Nozari, the head of the state-owned National Iranian Oil Company (NIOC), was appointed as caretaker minister.
Reports had surfaced in Irans official media earlier this year that Vaziri-Hamaneh would face the sack for failing to run the ministry in line with Ahmadinejads plans.
In a statement in April, however, the Oil Ministry maintained that Vaziri-Hamanehs time in office had been extended until the end of Ahmadinejads tenure.
The important portfolio of Oil Minister was vacant for several months when Ahmadinejad became President in late 2005, as deputies in the hardline-dominated Majlis (Parliament) voted down three other nominees for the job on the grounds that they were not capable of handling the vital oil sector.
Vaziri-Hamaneh is a veteran Oil Ministry official who served in the previous government as a deputy oil minister.
Iran ranks second in oil production among the OPEC states, accounting for some 80 percent of the countrys export revenues.
