Campbell took to LinkedIn at the weekend to criticise National's Three Waters policy as a thin disguise for dog-whistling on co-governance.
The comments drew swift criticism from both sides of the political aisles - National saying they were "appalling" while Prime Minister Chris Hipkins described them as "inappropriate".
Directors of Crown Entities are supposed to act in a politically impartial manner under the Public Service Commission's code of conduct.
Campbell is accountable to Health Minister Ayesha Verrall in his Te Whatu Ora role and this afternoon Verrall confirmed she had sacked him.
"I have raised with Mr Campbell serious concerns about the political nature of his recent social media comments," she said.
"I no longer have confidence that Mr Campbell is able to exercise the political neutrality necessary for his role at Te Whatu Ora."
"It is of vital importance that all Public Service board members, especially Chairs, uphold the political neutrality required under the Code of Conduct which they sign upon appointment.
"I will announce a new permanent chair in due course.
"I thank Mr Campbell for his contribution since the establishment of Te Whatu Ora last year."
In a statement, Campbell said the removal from his position was "an inappropriate reaction to statements made in my private capacity".
"I have spoken to Christopher Luxon who has accepted my apology for any personal offence my statements may have caused. He accepted my apology.
"I have also apologised to Minister Verrall for any difficulty which my statements may have caused for her and the government."
Speaking to RNZ's Checkpoint programme today, Campbell continued to defend his actions.
"I've received a letter from the minister which responded to a letter from my lawyers, indicating that she has removed me from that position as chair of Te Whatu Ora. I think that's a mistake and an overreaction to the statements I made in a private capacity but nevertheless that's what she's done.
"I think I'm entitled to make comments as a private citizen, which I did in the LinkedIn post.
"And secondly, the suggestion is that I've somehow got offside with the opposition, which given that I spoke to Christopher Luxon earlier today, we discussed the issues. I made an apology to him for any personal offence he had taken, he accepted that apology. We had a very nice discussion about it.
"So I don't believe there's any issue there. I've seen Richard Prebble from the ACT Party saying that he believes I have the right to make statements of this kind."
He said the comments that he made were on a public forum, but he made them in a private capacity.
"I didn't make those statements as chair of Te Whatu Ora ... I always have to have regard to the interests of Te Whatu Ora and I don't see anything in the statements I've made which was in any way damaging to Te Whatu Ora."
The comments showed my political position, but there is nothing in the code of conduct which suggests you should not do that, he said.
Campbell said emphasised his strong commitment to the kaupapa of the Pae Ora legislation and the work which Te Whatu Ora and Te Aka Whai Ora were doing to implement that legislation.
"I have devoted huge energy and time and involvement to that end. I am disappointed that I will not be working directly with the thousands of health sector staff, patients and whānau with whom I have been actively engaged. My support for them is undiminished.
"The principle of working in Tiriti partnership to achieve equity in the lives of all New Zealanders is core to my beliefs and I make no apology for that."
Campbell would not rule out taking legal action over the matter saying it was one possible line of action.
