Aslan Maskhadov was elected president in 1997 during Chechnya's three-year period of de facto independence. He has been on the run since Russian troops poured back into Chechnya in 2000.
The ex-deputies of the parliament said they had consulted with Chechens and then adopted a resolution last week to remove Maskhadov under provisions in the constitution long in disuse.
"We came to the conclusion that stability was possible only by removing Maskhadov," Isa Temirov told a news conference. Maskhadov had "committed crimes and seized power illegally".
They denied that the move was inspired by Russian officials in order to denigrate Maskhadov’s position.
"Maskhadov has been stripped of his powers by his own associates and comrades-in-arms," Sergei Yastrzhembsky told journalists in St Petersburg.
However, he admitted that Maskhadov continues to enjoy some support in Chechnya. An official website for the separatist movement condemned the removal of Maskhadov, saying Chechen laws bar the dismissal of a president during wartime.
Putin has met with pro-Russian
Kadyrov in the past
On Thursday, two candidates were declared out of next month's Chechnya presidential election, a key part of Kremlin plans to end a decade of conflict. That turned the poll, despite the presence of eight runners, into little more than a one-person race for the Kremlin's favoured candidate, Akhmad Kadyrov.
One of the sidelined candidates, Malik Saidullayev, was disqualified by a court and described the poll as a farce. The other hopeful said he was taking up a job as a Kremlin adviser.
Although Putin says he backs no particular candidate, he met Kadyrov on Thursday at his Black Sea holiday home.
The Moscow press is saying the election itself has become pointless.
"The election is over," wrote the daily Vedomosti. "No contest for Akhmad Kadyrov," echoed Izvestia.
Russian officials have ruled out talks with Maskhadov or other separatists, all barred from the election.
The former members of parliament said Saidullayev was most popular and the latest withdrawals made the election untenable.
"If there is no Saidullayev then the elections will not be fair...and if the elections are not fair, there can be no stabilisation," one former MP, Khasan Atayev, said.