She stepped down in March this year to focus on her role at the ABC.
ABC Chairman Justin Milne said the decision was made in the "long-term interests of our own people and the millions of Australians who engage with ABC content every week".
Michelle Guthrie has been a controversial figure at the ABC as she managed tighter budgets along with leading expansion into new business areas.
Communications Minister Mitch Fifield noted Ms Guthrie's departure.
Why did the ABC board move so decisively and why now? She said there is no justification for the Board to trigger the termination cause and she is considering her legal options.
But some ABC staff welcomed the move.
'Excellent decision, ' Ms Neighbour wrote.
Melbourne radio broadcaster Jon Faine said Ms Guthrie's term was an "astonishing fail".
"The ABC Act fixes the term of appointment of the managing director at five years".
More than 100 dead after ferry sinks in Tanzania
The death toll rose above 100 on Friday after a ferry capsized and sank on Lake Victoria, Tanzania state radio reported. Some of the deadliest have occurred in Tanzania, where passenger boats are often said to be old and in poor condition.
What on earth is the government's explanation for Michelle Guthrie's apparent sacking as head of the ABC.
"That is possibly an area that could have been better".
"I think it's different to what happened with [Malcolm] Turnbull, in that there isn't a voting selection here that I'm aware of that is one person over an another", he said.
- 'I've got to say, I'm perplexed. She was sacked by the board, with the decision announced this morning.
"At no point have any issues been raised with me about the transformation being undertaken, the Investing in Audiences strategy and my effectiveness in delivering against that strategy".
ABC executive David Anderson has been appointed acting managing director as the broadcaster begins the formal search process for Ms Guthrie's full time replacement.
"To me, it is the content produced by the ABC that is of primary importance to Australians, with the technology used to deliver that content a distant second". We'll update this story when we know more.
Milne conceded Guthrie had done a "pretty good" job turning the ABC towards its digital future.
"This includes refocusing daily journalism away from lifestyle content and "clickbait" and back towards news and current affairs", the union said.
"We appreciate that a change in leadership creates uncertainty, however, we are firmly of the view that this decisions is in the best interest of the organisation", he said.