Prime Minister Prayut Chan-o-cha has transferred the Bangkok Mass Transit Authority (BMTA) director to the Prime Minister's Office, Transport Minister Arkhom Termpittayapaisith said on Sunday.
Mr Arkhom said BMTA chief Surachai Eiumwachirasakul was transferred on March 22.
The prime minister used his authority as chairman of the National Council for Peace and Order (NCPO) to move Mr Surachai out of the BMTA, the minister added.
The 68th order of the NCPO gives Gen Prayut power to move officials to improve efficiency of state organisations.
Asked whether the move was involved with the delayed purchase and delivery of 489 air-conditioned, natural gas-powered buses, Mr Arkhom said it was part of the reason.
Mr Arkhom said the BMTA board chaired by Pol Gen Aek Angsananont will call a meeting on Monday to appoint an acting director.
The bus project has stalled as the BMTA has not made a decision to accept or reject the buses.
Mr Surachai said on Sunday that he was not aware of the transfer order and added that he was ready to follow the directive.
He denied reluctance over the bus project, saying he had done his best but the final decision rests with the BMTA board.
On Feb 24, Mr Surachai said the BMTA was seeking opinions from two government departments on how to go about scrapping the contract to procure the fleet from Bestlin Group.
He said at the time that his agency had not yet sent the contract cancellation letter to Bestlin as a BMTA panel responsible for receiving the buses needs to tread carefully before revoking the contract to avoid possible lawsuits.
Advice from the Office of the Attorney-General and the Comptroller-General's Department needs to be sought, he added.
The delivery of the fleet struck problems after the Customs Department alleged that the vehicles were actually produced and assembled in China, not in Malaysia. The contract stipulated the Malaysian content, which would allow Bestlin to be eligible for a 40% import duty exemption.
The buses were sent to Bangkok from Malaysia.
The firm has denied any wrongdoing.