The capital of Southeast Asia's biggest economy will formally move in August from traffic-clogged and sinking Jakarta to the planned city of Nusantara.
The legacy project by outgoing Indonesian President Joko Widodo has been hampered by a lack of foreign investment, land ownership issues and delays.
"President Jokowi has conducted a leadership change," Bambang Susantono, the outgoing official, wrote on Instagram late Tuesday.
"Allow me to apologise for any mistakes and shortcomings in my duties," added Bambang, a former Asian Development Bank official.
The Indonesian government said he resigned without explanation and would be replaced by Basuki Hadimuljono, the country's public works and housing minister.
Bambang's deputy, Dhony Rahajoe, was replaced by a deputy agrarian minister.
The sudden change was described as "shocking and strange" by opposition lawmaker Mardani Ali Sera.
Both officials were known for their professionalism and careful approach to the megaproject, he told AFP.
The new city is scheduled to begin operating as the country's new political centre on August 17, Indonesia's independence day.
Environmentalists have warned that the planned city will speed up deforestation in one of the world's largest stretches of tropical rainforest.
The Indonesian government aims to have 1.9 million people living in Nusantara by 2045, importing a wave of human and industrial activity into the heart of Borneo.
Thousands of civil servants are expected to move to the city in September to begin work, but Jakarta's plan has already been delayed by several months due to slow construction.
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