After a meeting of the ruling Communist Party on Wednesday, the government said in a statement that he had broken party rules and had negatively affected its reputation.
Mr Thuong is believed to have resigned over his links to a corruption scandal in his home province.
He was appointed last year to replace another president forced to step down over corruption.
The party's leadership has prioritised corruption as a problem it needs to address.
I hope so, here's hoping the party leadership realizes that would be a mistake to ally with the USA against the PRC.