Minister for Justice Alan Shatter has relieved Garda Confidential Recipient Oliver Connolly of his duties, Taoiseach Enda Kenny has told the Dáil.
The sacking follows claims of an inappropriate conversation involving Mr Connolly.
Mr Connolly is a lawyer who was appointed by Mr Shatter in 2011 to be the point of contact for whistleblowers within the Garda.
He has been the focus of controversy since independent TD Mick Wallace claimed to have a recording of him warning whistleblower Sgt Maurice McCabe that Mr Shatter would be angry and come after him if his claims reached the media.
This issue was taken up by Fianna Fáil.
Party leader Micheál Martin read part of the transcript of the alleged conversation into the Dáil record last week.
"If stuff was to get out into the public, the print media, I tell you something Maurice - and this is just personal advice to you - if Shatter thinks you're screwing him, you're finished."
"What I'm saying to you is, if stuff is to get into print broadcasting media, if Shatter thinks it's you, or if he thinks that it is told by the Commissioner or the gardaí, here's this guy again trying another route to put you under pressure, he'll go after you," the transcript added.
Mr Martin told the Dáil today: "It is fundamentally wrong. What garda whistleblower in their right mind would ever go near the system again?"
He said Sgt McCabe's claims went beyond abuse of penalty points to include garda incompetence that led to people being murdered.
"It is not just about penalty points, it is about other serious issues that would make the hair stand on your back," he added.
The Taoiseach said he had sought a report and that he regarded the issue as a very serious matter.
He told a shocked Dáil that Mr Shatter had now relieved Mr Connolly of his duties.
Sinn Féin deputy leader Mary Lou McDonald said the Taoiseach should relieve Mr Shatter of his duties, but Mr Kenny defended his minister.
Around 50 people are protesting outside the Dáil today, calling for Mr Shatter to resign.
Meanwhile, Minister Shatter is appearing before a joint Oireachtas committee this afternoon to discuss the suspected bugging of the offices of the Garda Síochána Ombudsman Commission.