Basil McCrea has lost the Ulster Unionist Party (UUP) whip over his stance on the Union flag dispute, the party leader said.
He was accused by Mike Nesbitt of lacking self-discipline and the ability to work as a team following a dispute with his party over the flying of the flag at Stormont. The MLA will now not be bound by UUP rules at the Assembly.
Mr McCrea represents Lagan Valley and was defeated for the leadership of the party during an earlier election.
Mr Nesbitt said: "Basil's inability to exercise self-discipline or demonstrate the basic characteristics of teamwork are doing enormous damage to the Ulster Unionist Party.
"For the reasons of lack of self-discipline and teamwork, and for those reasons only, he has left me no choice but to remove the party whip with immediate effect."
Mr McCrea said he was not expecting Mr Nesbitt's announcement.
"The party leader is entitled to to make his decisions and I stand firmly by what I have said and the way I said it," he said.
"There are really serious issues facing society. We have to get people off the streets and look after people's jobs and look after business."
Mr McCrea has called for all-party talks to resolve the ongoing flag dispute.
On Monday he attended a UUP assembly group meeting which unanimously empowered the Assembly commission representative to discuss the issue of flying the flag at Parliament Buildings.
Within 48 hours he said it was not the right time to do what he had previously endorsed and later described Monday's decision as a "stupid idea".
The Alliance Party has led calls for the Stormont flags issue to be dropped until loyalist street protests over the decision to restrict the number of days the flag is flown from Belfast City Hall end.
Some of the protests have resulted in rioting and violent attacks on police and property.
The DUP wants a consultation process to extend the number of days the Union flag is flown at Stormont.
A meeting of the Assembly Commission, the cross-party group which manages the estate, did not go ahead on Tuesday because there were not enough members present. Sinn Fein, the SDLP and Alliance boycotted the meeting.
Mr McCrea has said the past two weeks have been a disaster for Northern Ireland, the business community in Belfast and the "pro-Union family"