He also lost his post as chairman of the Champions League Twenty20, a tournament organised jointly by India, Australia and South Africa.
Since April, Modi has been under investigation for wrongdoings by the BCCI and the Indian government, which has charged him with a number of corruption offences.
Chirayu Amin, chairman of a pharmaceutical group, will replace Modi as the head of IPL.
According to the BBC, it has been reported that Modi will be replaced as one of five vice presidents of the BCCI by Rajiv Shukla, a ruling party politician and current head of the board's media committee.
