Amado Boudou, the economy minister, told a news conference: "Redrado has led the Central Bank and today that role is over."
Boudou said that it was not necessary that Kirchner go to Congress to remove Redrado because she was simply accepting his previous offers to resign whenever she wanted.
He added that Mario Blejer, the economist and former central bank chief, had been selected to replace Boudou.
However, Blejer told local media that he could not accept a position without Redrado vacating it first.
Kirchner initially announced the demand for Redrado to resign on her website.
Last month Kirchner signed a presidential decree to move the $6.5bn into the Bicentennial Fund, a new fund to guarantee debt payments in 2010 and ease restrictions on cash for other spending.
She said it would help to end Argentina's isolation from global credit markets.
Opposition legislators were against the move and the Supreme Court sought a clarification on it.
Kirchner's control in Congress has weakened since mid-term elections last year, meaning Redrado may not be forced out by the chamber.
In 2010 Argentina will face maturing debt repayments of $13bn and investors remain uncertain over how secure the country is after it committed one of the largest debt defaults in history in 2001.
"Today's events serve as a reminder of the acute political risks that still face investors in Argentina and ... the government's planned return to international debt markets is unlikely to be smooth," Neil Shearing, senior emerging markets economist at Capital Economics, wrote in a report.