Colonel Saeed Shokrian "was removed from his post due to negligence and lax supervision over personnel under his command," police.ir reported, quoting a decree by Iran's police chief, Esmaeel Ahmadi Moghadam.
His dismissal came weeks after the fate of blogger Sattar Beheshti, reportedly tortured to death after criticising Iran's regime in his posts, provoked an international outcry.
Beheshti, 35, was found dead in his cell in a Tehran prison on November 3 after being arrested on October 30, according to chief prosecutor Gholam Hossein Mohseni Ejeie.
His death also provoked outrage inside the regime, in a rare case of Iran accepting international criticism over a human rights complaint.
Judiciary officials have promised a full investigation into the case, leading to seven arrests so far, according to Iranian media.
"The judiciary will investigate the case within the framework of law, and will confront those responsible for the incident," Mohammad Javad Larijani, head of the judiciary's High Council of Human Rights, said in remarks reported by media on Saturday. He called the death "suspicious".
Mehdi Davatgari, a lawmaker overseeing a parliamentary inquiry into Beheshti's death, had earlier called for the removal of Shokrian.
Preliminary investigations by the coroner, the prosecutor and the parliamentary committee suggest Beheshti's death was caused by mistreatment, either through beating or psychological torture, at the hands of the cyber police.
Alaeddine Boroujerdi, who heads parliament's national security and foreign affairs committee, took issue on Saturday with claims by pathologists that Beheshti had died from shock and fear, saying he had "very clearly" been beaten while in detention.
He called on the cyber police to "seriously review its practices."
Iran formed the police unit in early 2011 to combat "cyber crimes," particularly those committed on social networking sites which are popular among the opposition and dissidents.