"The Staff Disciplinary Board at Karolinska Insitutet [KI] has today decided to relieve Paolo Macchiarini of his duties as a researcher at KI. He is to be informed immediately that his contract has been rescinded," read a statement on its website on Wednesday.
It had previously said he would be allowed to stay until his contract expired later this year.
"It's impossible for KI to have any kind of collaboration with Paolo Macchiarini any longer," said HR manager Mats Engelbrektson in a statement on Wednesday.
"He has acted in a way that has had very tragic consequences for the people affected and their families. His conduct has seriously damaged confidence in KI and for research in general."
Macchiarini's career has been tainted by a series of controversies in recent years, which came to a head when Swedish public broadcaster SVT in January produced a documentary shedding new light on some of his procedures.
He rose to fame in 2011 for carrying out the first synthetic organ transplant, making a trachea – or windpipe – from plastic, and using it as a frame into which the patient's own stem cells could then grow.
Three of these surgeries were carried out at the Karolinska University Hospital, which is closely affiliated with the institute. However, two of the patients later died and one is awaiting a second transplant in the US.
He has also faced allegations of not having applied for ethical permission before carrying out a number of his procedures, including one on a woman in Russia, which he performed without the hospital's approval.
He is also accused of having lied on his CV when he applied for a position at KI.
Macchiarini told Swedish newspaper Svenska Dagbladet in February that the accusations against him were "false" but that he would not speak out until after ongoing investigations were concluded.
KI declined to give any further comment on Wednesday.