Khaled al-Obeidi is the first sitting defence minister to receive a no confidence vote from parliament since the overthrow of former Iraqi leader Saddam Hussein in 2003. The vote against him comes after weeks of political wrangling over corruption allegations.
The minister received 142 votes of no confidence in parliament Thursday, slightly more than the simple majority needed for the vote to pass, according to lawmakers Sadiq al-Rikabi and Mohammed Saadoun from the powerful State of Law block.
"I have tried my best to fight against corruption with the means that I have," al-Obeidi wrote in a statement posted to his Facebook page shortly after the vote, "but it seems the voices of the masters of corruption are much higher and much stronger."
Al-Obeidi was appointed by Prime Minister Haider al-Abadi shortly after he took office in 2014 in the midst of a political and security crises unleashed by the Islamic State group's takeover of large swaths of northern and western Iraq, including Mosul. At the time al-Abadi said al-Obeidi's appointment was intended to fight entrenched corruption that had weakened the country's military before the 2014 IS blitz.
Last month al-Abadi accepted the resignation of the minister of interior amid growing public anger over security lapses in and around Baghdad that allowed IS to carry out large-scale insurgent attacks killing hundreds of civilians.
The no-confidence vote comes as Iraq's military has pushed to within 50 miles of Mosul, the country's second largest city which has been held by IS for more than two years.
"The sacking of the minister will not affect the course of the battle to liberate the city of Mosul," al-Rikabi told The Associated Press.
Iraqi forces retook the key town of Qayara, near a major air base south of Mosul from the Islamic State group Thursday, according to a statement from the prime minister's office. Al-Abadi said the victory marks an "important step" on the road to Mosul.
Iraqi troops launched the operation to retake Qayara this week, more than a month after retaking the nearby air base from IS. Iraq's Ministry of Defence said the army's 9th division and the country's elite special forces took part in the operation that was closely supported by coalition airpower.
Iraqi officials have repeatedly pledged that Mosul will be retaken this year. Qayara is located 70 kilometres (45 miles) south of Mosul.
Separately, Iraqi officials say a series of bombings and shootings across the Iraqi capital has killed 13 people and wounded 24. No group immediately claimed responsibility for the attacks.
The police say separate roadside bombings on busy commercial streets and two sticky bombs attached to cars in neighbourhoods across Baghdad killed seven and wounded 24 on Thursday. Additionally, three shootings in different Baghdad neighbourhoods killed six people.
Police and hospital officials confirmed the casualty toll, speaking on condition of anonymity as they were not authorized to talk to reporters.