“Following discussions with Steve Smith and David Warner they have agreed to stand down as Captain and Vice-Captain respectively for the remainder of this Test match," Cricket Australia said in a statement.
After Smith's removal, Tim Paine will step in as acting captain for the remainder of this Test, the statement said.
The decision to remove Smith and Warner came hours after Australian Prime Minister Malcolm Turnbull asked the board to take decisive action against the accused.
"We all woke up this morning shocked and bitterly disappointed by the news from South Africa. I've spoken with David Peever, the Chairman of Cricket Australia, a few moments ago and I've expressed to him very clearly and unequivocally my disappointment and my concern about the events in South Africa," espncricinfo quoted PM Turnbull as saying.
After the government’s statement, now the pressure is mounting on the Australian cricket board to sack captain Smith for bringing “disgrace” to the country.
On Saturday, Australian opener Cameron Bancroft was caught rubbing the ball using a “yellow tape” to help bowlers with reverse swing.
Later, team’s captain Smith admitted that he was also involved in the cheating but refused to step down.
“We spoke about it at Lunch and I’m not proud of it. It’s not within the spirit of the game, my integrity or the team’s integrity, the leadership group’s integrity has all come to question and rightly so. It’s not on and it certainly won’t happen again I can promise you that,” Smith said.
This was not the only incident when the Australian captain resorted to cheating in order to win the match.
Earlier in March 2017, during the Bengaluru Test against India, Smith was caught looking for signals from the dressing room on whether to review field umpire’s decision to give him out leg-before.