"The board of the German Bundesbank today unanimously decided to ask the Federal President to dismiss Dr. Thilo Sarrazin as a member of the board," the central bank said in a short statement.
Bundesbank officials distanced the Frankfurt-based institution from Sarrazin's incendiary comments against Muslims and Jewish heritage earlier this week, but had faced immense political pressure to fire him as well.
Late on Wednesday, President Wulff, who is the only person holding the power to remove members of the central bank's leadership, told broadcaster N24 that the Bundesbank should act quickly to limit the political fallout.
“I believe that the head of the German Bundesbank can still do a few things so that the discussion doesn't damage Germany – above all internationally,” he said.
The centre-left Social Democrats have also started a process to eject the 65-year-old former Berlin finance senator from their party following widespread outrage due to Sarrazin's comments that races were distinguished by a particular gene such as “a Jewish gene.” That followed a string of controversial remarks he has made about Muslims and integration in Germany.
Finance Minister Wolfgang Schäuble also said Sarrazin's actions must have political consequences, but declined to elaborate on a discussion he'd had with the central bank's President Axel Weber.
Schäuble called Sarrazin's comments “irresponsible nonsense” that had “obviously” violated his post's duty to display restraint.
Ali Kizilkaya, the leader of Germany's Muslim council, or Islamrat, accused Sarrazin of Islamophobia and racism.
“I find it very regrettable and practically alarming that the Islamophobia in the form of Mr. Sarrazin seems to have slowly moved into the middle of our society,” he told daily Hamburger Abendblatt.
SPD parliamentary spokesperson for domestic policy Dieter Wiefelspütz had also called for Sarrazin to be fired.
“Mr. Sarrazin has disqualified himself through his statements as Bundesbank board member and SPD member,” he told the same paper.
Sarrazin's controversial remarks have coincided with the launch of his book Deutschland schafft sich ab - Wie wir unser Land aufs Spiel setzen, or “Abolishing Germany - How we're putting our country at jeopardy.”