
City's rulers in Abu Dhabi took the decision after high-level talks over the past few weeks to determine what to do about the way the former owner had become an increasing source of embarrassment to his successors at Eastlands.
The new owner, Sheikh Mansour Bin Zayed Al Nahyan, and the chairman, Khaldoon Al Mubarak, concluded that it would be "inappropriate" to allow Thaksin to continue holding such a prominent position and that the former prime minister of Thailand should become the first high-profile casualty of their reign.
Simon Pearce, the sheikh's personal envoy, and the other English representatives on City's board were also aware that the Premier League had strong objections about the involvement of a fugitive who was once described by Human Rights Watch as "a human-rights abuser of the worst kind".
Thaksin, who accepted the position when he sold the club to ADUG last September, has been on the run, spending time in the Middle East, China and the Bahamas, since his UK visa was cancelled in November. His current whereabouts are a mystery to City but the club's executive chairman, Garry Cook, managed to get a message to the 59-year-old, via intermediaries, before the 1-0 defeat of Middlesbrough on Saturday.
Thaksin's name was subsequently removed from the match-day programme and has also been taken off the club's website as well as various places inside the stadium.
The decision is understood to have been accepted by Thaksin and has gone down well inside the City boardroom, with one high-ranking official recently saying that it was "disgusting" that a convicted criminal should be allowed an honorary role at the club.
Thaksin, ironically, is still a popular figure with many City supporters, who credit him with rescuing the club from financial hardship and setting up the ADUG deal. However, City are also aware of fans who refused to watch the club while Thaksin and his family were in control at Eastlands.
Thaksin, who made a £120m profit by selling City, may now try to sell his remaining 10% stake in the club as tries to build a new life - he is reported to be building a £5.5m property in China - and fight Thailand's extradition procedures. He has always maintained his innocence, describing his conviction at Thailand's supreme court last October as "politically motivated", and claiming he had to flee the country because it was not safe for him to stay.