Iran's Labour Minister Ali Rabiei was impeached on Wednesday after months of mounting anger over the government's handling of an economic crisis that has deepened with the return of United States sanctions.
Mr Rabiei lost a confidence motion in parliament by 129 votes to 111, giving President Hassan Rouhani three months to replace him.
Mr Rouhani has been under mounting pressure in recent weeks to reshuffle his economic team.
The withdrawal of the US from a landmark 2015 nuclear deal led to the first tranche of related sanctions being reimposed on Tuesday.
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But Iran was already struggling with long-standing problems of unemployment and low investment, which Mr Rouhani's team has appeared powerless to tackle.
Mr Rabiei, 62, is a long-standing ally of Mr Rouhani, who also served as an adviser to reformist former president Mohammad Khatami between 1997 and 2005.