Irish Football Association president Raymond Kennedy admitted there had been a breakdown in relations between the governing body and Howard Wells, which led to his sacking as chief executive.
Kennedy stated there had been no financial settlement and Wells was consulting his lawyers about the way forward.
It was revealed in August that Wells had taken a grievance case against his employer, claiming he had been treated unfairly because he was English.
Then last week it was reported he was a leading contender for the vacant chief executive's position at the Football Association.
Kennedy told BBC Radio Ulster: "It got to the stage where his job had become untenable. Therefore in the best interests of the IFA we took this action.
"There was no debating between us whatsoever. As far as I am concerned we will be moving on. There will be a board meeting at the end of the week. I am 100% sure everything has been conducted in a proper manner."
The news came out of the blue as Wells attended the World Cup qualifier in Slovenia, where Northern Ireland lost 2-0 on Saturday.
A short statement read: "The Irish Football Association has today terminated the employment of its chief executive in the best interests of the Association and the member clubs."
Northern Ireland face San Marino on Wednesday at Windsor Park and Kennedy added: "We had a terrible result at the weekend. We are concentrating on our next match, securing three points and moving on in the World Cup.
"The result (against Slovenia) had nothing to do with this. It is a pure coincidence."
Wells became the IFA's first chief executive in November 2004 - he had held similar posts at Watford and Ipswich.
An experienced sports administrator, he was the inaugural chairman of UK Sport and also chaired the Central Council of Physical Recreation.
Wells said: "The matter is in the hands of my legal advisors. I have no further comment to make."