Tahmasb Mazaheri has been replaced in the interim by Mahmoud Bahmani, currently general secretary of the bank, pending the nomination of a new governor, said the official who asked to remain anonymous.
"I confirm the news. It will be officially announced tomorrow morning (Sunday)," he added.
Mazaheri, a former minister of economy and finance, was appointed to the central bank post in September 2007. The official gave no explanation for his dismissal.
In recent months, there has been a public struggle between Mazaheri and the ministry of labour over financial policy, particularly regarding bank rates and loans to financial institutions.
About 10 days ago Minister of Labour Mohammad Jahromi said he had written to President Mahmoud Ahmadinejad asking him to settle the matter.
Mazaheri favours a policy based on freeing up bank rates coupled with tight controls on lending policy to control liquidity, as a means of bringing down inflation.
But recent official figures from the central bank showed that inflation hit 27.6 percent in the calendar year that ended August 21, as Iranians were again battered by rising prices of basic foodstuffs and goods.
Mazaheri's departure comes as several economists criticised the president for his own economic policy, which involved a massive injection of oil money into the economy, which has led to a rise in prices.
Mazaheri had, up until now, resisted calls from critics inside the government who wanted a more flexible approach to loans for small production units, as a way of creating jobs.
Since coming to power, Ahmadinejad has favoured these small production units as a way of bringing down unemployment.
But economists, who have been widely critical of this policy, the beneficiaries of these subsidies have often spent the money on other things.
