Tharoor accepted the decision as a "loyal worker of Congress" but suggested he did not get a chance to put his views across, saying he would have welcomed an opportunity to respond to the complaint by the state unit against him.
Kerala Pradesh Congress Committee had prepared a report against Tharoor, which was referred to AICC's disciplinary action committee a few days ago.
The report of the Kerala unit had held that Tharoor's adulatory statements about Modi had hurt Congress workers in Kerala, who had worked sincerely and tirelessly for his victory from Thiruvananthapuram Lok Sabha seat.
Taking a swipe at Congress for acting against Tharoor, BJP said it reflects "intolerance" as the party cannot digest somebody doing good work.
Though the AICC maintained that the decision was taken against Tharoor as the state unit was "incensed" with Tharoor's remarks, including on social media, for last few months, the immediate provocation was his accepting with alacrity the Prime Minsiter's invite to him to be an ambassador of "Swachh Bharat" mission.
"Congress President Sonia Gandhi has accepted the recommendation of the AICC disciplinary committee to remove Shashi Tharoor from the list of spokespersons of the AICC with immediate effect.
"The Kerala Pradesh Congress Committee had submitted a complaint in this regard to the disciplinary committee," said party general secretary organisation Janardan Dwivedi in a press release.
After the party action, Tharoor posted his statement on Twitter and Facebook saying it is the "prerogative of the party to "alter" the responsibilities given to him.
At the AICC briefing, party spokesperson Shobha Oza said that a spokesperson has to always speak the party line.
Asked whether Tharoor continues to be a Congress member, she said he remains a Congress leader and is still the Chairman of the Parliamentary Standing Committee on External Affair.
Replying to a flurry of questions as to why Tharoor was not given an opportunity to explain his position or whether it was right for Congress to take action against him for participating in a cleanliness campaign, Oza sought to give an impression that this alone was not the reason for action against him.
A senior party functionary speaking on the condition of anonymity said that Tharoor was given a "far too long rope" and the party was repeatedly embarrassed by him as he praised BJP's Prime Minister as well as Opposition Chief Ministers like Naveen Patnaik in Odisha.
Asked whether Congress removed Tharoor after the fresh AIIMS report suggesting poisoning behind his wife Sunanda Pushkar's death, Oza was dismissive saying the decison has "nothing to do with that".
Sunanda was found dead in a 5-star hotel in south Delhi on the night of January 17 after her Twitter spat with Pakistani journalist Mehr Tarar over an alleged affair with Shashi Tharoor.
In his statement, Tharoor said that he has seen the press release issued by the AICC and as a "loyal worker" of the Congress party, he accepts the decision of the party president to relieve him of the responsibilities as a spokesman.
"I am in politics to serve the people of India, and my constituency, Thiruvananthapuram, through my service to the Congress party. This I have always done with utmost sincerity and commitment and I will continue to do so.
"Whatever responsibilities the party has entrusted to me I have fulfilled without reservation, and I fully recognize it is the prerogative of the party to alter these responsibilities," Tharoor said.
Though Oza claimed that the three-member disciplinary action committee of AICC comprising of Motilal Vora, A K Antony and Sushilkumar Shinde "examined" the complaint of the Kerala Congress and took a decision, Tharoor indicated his unhappiness over not being given an opportunity to explain his stand.
"While I have not yet seen the KPCC complaint referred to, and while I would have welcomed an opportunity to respond to it and draw the attention of the AICC leadership to the full range of my statements and writings on contemporary political issues, I am now treating this matter as closed and have no further comment to make," he said.
BJP was quick to criticise the Congress on the development with its secretary Siddharth Nath Singh saying, "It is their internal matter. But certainly, it shows the level of tolerance or intolerance in the Congress."
Singh noted that Tharoor had been selected by Modi as one of the nine prominent people for pushing the "apolitical" 'Swachh Bharat' campaign which was an unfulfilled dream of Mahatma Gandhi.
The action against Tharoor shows that Congress will "sack even those who do good work. There is no regard for good work in Congress," he said.
Oza, however, hit back at the BJP, saying that the Swachch Bharat mission is only the copy of Nirmal Bharat campaign by the UPA and stressed that the action against Tharoor is not the outcome of this issue.
"Kerala PCC registered its objections to remarks made by Tharoor for last many months, which they felt, were hurting the interests of Congress. The disciplinary committee examined it and gave a report. Congress President acted on the disciplinary committee report and it is final," she said.
Sources in the Congress said that the party was also not happy when Tharoor had gone to the US during the time the Prime Minister was in that country and had appeared on various television channels.
"Being the head of Parliamentary Committee on External Affairs, his remarks gave a certain legitimacy to all that he spoke about the Prime Minister," a senior party functionary said stressing that nobody was assigned from Congress to the US during Modi's visit and speak on the party's behalf.
Tharoor has not been briefing media at the AICC from June 4 after his piece in US-based Huffington Post praising Modi kicked up a big row in Congress.
The Congress leader had, in his article, said that it would be "churlish" if his party did not take note of Modi's efforts to sound gracious and accommodative and reinvent himself from a "hate figure into an avatar of modernity and progress".
Congress had snubbed him immediately, describing it as his "personal view". Since then Tharoor has not briefed the media from AICC podium.
Tharoor has so far rejected suggestions that he was moving closer to the BJP by asserting that he was a "proud Congressman" and never endorsed the "Hindutva agenda" of the BJP.
In a massive rejig of the AICC media department ahead of Lok Sabha elections, Tharoor was made a national spokesperson in the AICC in January while he was still in the thick of a controversy over his wife's sudden death.