Vaughan Gething has sacked his minister for social partnership, Hannah Blythyn, alleging that she leaked text messages to the media.
It follows a story, originally published by Nation.Cymru, which revealed Mr Gething told ministers he was deleting messages from a pandemic-era group chat.
The Labour MS for Delyn strongly denied that she has "ever leaked anything".
In his shock announcement, the first minister said he had "no alternative" after reviewing a "recent disclosure of communication".
Her removal from Mr Gething's government follows turmoil within Labour in Cardiff Bay over controversial donations to Mr Gething's leadership campaign.
It came on the same day it emerged that Mr Gething will be giving £31,000 to Labour from his campaign funds, having spent most of the £250,000 he was gifted.
It included £200,000 from a company owned by a man previously convicted of environmental offences.
Plaid Cymru said Mr Gething should consider his position, while the Welsh Conservatives are considering tabling a confidence vote in Mr Gething's leadership.
A replacement for Ms Blythyn is expected to be appointed on Friday.
The first minister said: “Having reviewed the evidence available to me regarding the recent disclosure of communication to the media, I have regrettably reached the conclusion I have no alternative but to ask Hannah Blythyn to leave the government."
He said there was a "route back for her to take up a government position again in future".
"The government has offered ongoing support to the member," Mr Gething added.
But in response Ms Blythyn said on X, external: "I am deeply shocked and saddened by what has happened today. I am clear and have been clear that I did not, nor have I ever leaked anything. Integrity is all in politics and I retain mine.
"For a kid from Connah’s Quay it is an immense privilege to serve the community that shaped me, let alone to have served in my country’s government.
"I will say no more at present."
She has not responded to requests for comment.
Mr Gething denied that his government was split, in an ITV Wales interview.
"Ministers need to be able to trust each other, to share information freely and frankly," he said.
"My team of ministers are united about the reality of where we are and what we've had to do, and the fact that there are priorities for all of us in doing the things that matter to the people of Wales."
Hannah Blythyn was elected as the MS for the north east Wales seat of Delyn in 2016.
She has had several junior minister roles since 2017 - working as deputy minister for the environment, deputy minister for housing and local government and more recently minister for social partnership.
That post included responsibility for co-ordinating efforts to tackle poverty and domestic abuse, reform welfare and dealing with human rights and equality issues.
Ms Blythyn made headlines in February when she announced the Welsh government was taking over the South Wales Fire and Rescue Service, due to a culture of sexual harassment and misogyny within its ranks.
The Welsh government was asked if it would provide evidence that Ms Blythyn was behind the leak.
A spokesman said no, and that there was nothing to add to the earlier statement.
It emerged in May that Vaughan Gething had told other ministers in August 2020 that he was deleting messages from a group chat.
The story prompted a storm of criticism from the opposition, and questions over whether he had perjured himself at the Covid Inquiry.
Mr Gething denied that, and despite the contents of the disclosure - believed to be an iMessage - he claimed he never deleted any texts from his own phone.
In the leaked message, the then-health minister said: "I'm deleting the messages in this group.
"They can be captured in an FOI [Freedom of Information request] and I think we are all in the right place on the choice being made."
The Covid inquiry has said it will consider whether to take more evidence from Mr Gething.
BBC Wales was told that the Senedd's Welsh Conservative group is speaking to other parties about holding a confidence vote on Vaughan Gething's leadership.
The party called for Mr Gething to show the evidence for his allegation against Ms Blythyn.
Welsh Conservative Senedd group leader Andrew RT Davies said Mr Gething's Labour leadership campaign decisions were now "catching up with him".
"Just weeks into his time as first minister, Vaughan Gething has had to sack somebody from his cabinet, which is almost unprecedented in recent memory in Wales," he said.
Plaid Cymru's Rhun ap Iorwerth said Mr Gething had "lost the trust of his party and the nation".
He added: "Rather than seizing on the opportunity to put Wales on a fairer and more ambitious path, his tenure has been marred by controversy, a lack of transparency and serious questions about judgement.
"The sacking of one of his ministers, and the allegations and counter-allegations which surround it, demonstrates again that the first minister’s priority is self-preservation rather than the public interest.
"If anyone should be considering their position, it is the first minister himself."
Labour leader Sir Keir Starmer was asked about the first minister’s latest controversy, after the UK Labour leader gave a speech setting out the what the party would do first if it wins the general election.
He told BBC political editor Chis Mason: “I don’t know the details of what’s happened this morning”,.
Sir Keir added it would be “massively important for people across Wales” if an elected Labour UK government had the opportunity to work with a Welsh Labour administration.
