The shake-up came after Eisner got an unprecedented rebuke from the shareholders with 43% of them opposing his re-election.
Former US senator George Mitchell has been elected by the board to succeed as the new chairman.
The disgruntled shareholders blamed Eisner - both the chairman and CEO - for the company's recent lacklustre performance.
The vote marked a stunning turn of events in the Magic Kingdom, which faced a shareholder revolt led by former board members Roy Disney and Stanley Gold.
Though not binding on the board of directors, the vote expectedly bolstered opposition to Eisner's leadership.
Disney and Gold said: "The vote has sent a clear and undeniable message that dramatic change is needed now and that Michael Eisner must go."
At the meeting, Eisner defended his leadership, saying: "Your company has all the skills, the good management … to continue on its growth path."
After the vote, one big institutional shareholder, the California Public Employees' Retirement System (CalPERS) said the shareholder vote was "stunning" and should prompt a change in leadership.
CalPERS said "it now believes Eisner should step down as chairman and chief executive officer of the The Walt Disney Company by year's end and urged the Disney board to begin a succession plan immediately."
Analysts said the vote, which was far worse for Eisner than most had forecast, was an unprecedented shareholder rebuke.
"The shareholders have spoken," Angela Kohler, global media analyst with Federated Investors in Pittsburgh, said. "The number is large. This really puts pressure on the board to do something."