Sinn Fein councillor Francie Molloy has been suspended from the party pending a disciplinary hearing.
Mr Molloy is a councillor on Dungannon District Council
It is understood the action was taken on Tuesday after Mr Molloy went on BBC radio to speak out against party policy on the Review of Public Administration.
He went against Sinn Fein policy over the reduction of the number of district councils as part of the review.
The party's general secretary, Mitchell McLaughlin, said he was the person who told Mr Molloy he was being suspended.
On Wednesday, Mr McLaughlin said that as party secretary it was his job to inform members when disciplinary procedures were being taken against them.
"I did actually have to deliver the message, I have responsibilities as general secretary to apply the party procedures," he said.
Sinn Fein favours seven councils, but Mr Molloy, a veteran republican, said 15 would be better.
He earlier said his position was rooted in the civil rights campaign and that reducing the number of councils to seven would be "a sectarian headcount".
District councils will be cut from 26 to seven - Belfast and six others.
Mr Molloy is a councillor on Dungannon District Council which is set to be scrapped.
He is also a Sinn Fein assembly member for Mid Ulster.