General Reinhard Guenzel, the head of German military's special forces, was stripped of his post for praising a lawmaker who said Jews could be branded as a "race of perpetrators" for alleged crimes against civilians during the Russian revolution.
Announcing the dismissal on Tuesday, Defence Minister Peter Struck described Guenzel as a "lone, confused general".
At a hastily-arranged news conference, a clearly angry Struck said the general had damaged the image of the army with his "abstruse and confused" views.
The dismissal followed the leak of a letter in which Guenzel praised Martin Hohmann, a Christian Democratic Union (CDU) lawmaker who created more than a flutter by his controversial remarks very recently.
"I don’t think that you can call it an honorary dismissal when the minister throws him out," the defence minister said.
"I don’t think that you can call it an honorary dismissal when the minister throws him out"
The 59-year-old general had been heading the KSK, the elite unit which had been active in Afghanistan.
According to ZDF public television, Guenzel praised the CDU lawmaker for "an excellent speech … of the kind only seldom read or heard in this nation with such courage for truth and clarity."
Hohmann has already been censured for his comments by the CDU and removed from a key parliamentary committee.
Hohmann later said his words had been taken out of context and he had not meant to deny the unique character of the Holocaust or describe Jews as a race of perpetrators.