Vice Admiral Joseph Aucoin, who headed America's Asia-based 7th Fleet, has been relieved of his duties following the damage to the USS John S McCain.
Remains of some of the 10 sailors missing since the incident have been found in a flooded compartment in the ship.
Malaysian authorities assisting in the search also found a body, but it has not yet been confirmed whether it is a crew member of the guided-missile destroyer.
Admiral Scott Swift, commander of the US Pacific Fleet, announced on Wednesday that Vice Admiral Aucoin had been removed from his post "due to a loss of confidence in his ability to command".
Monday's pre-dawn collision involving the USS McCain, which is now docked in Singapore as a recovery operation takes place, has been determined not to have been intentional or the result of sabotage or cyber-intrusion.
It is the fourth major incident in the US Pacific Fleet this year.
SKY News.