The surprise move came one day after Harvey fired the two-star general in charge of the medical center in response to disclosures of problems at the hospital compound.
Defense Secretary Robert Gates said Harvey had resigned. But senior defense officials, speaking on condition of anonymity, said Gates had asked Harvey to leave.
Gates was displeased that Harvey, after firing Gen. George W. Weightman as the head of Walter Reed, chose to name as his temporary replacement another general whose role in the controversy was still in question.
"I am disappointed that some in the Army have not adequately appreciated the seriousness of the situation pertaining to outpatient care at Walter Reed," Gates said in the Pentagon briefing room. He took no questions from reporters.
Army Surgeon General Kevin Kiley continued to downplay the severity of the problems at Walter Reed, CBS News national security correspondent David Martin reports.
"While we have some issues here, this is not a horrific catastrophic failure at Walter Reed," Kiley told CBS News.
Gates said a permanent replacement for Weightman would be announced by the Army later Friday.
Harvey has been the Army secretary since November 2004. Gates said Harvey will depart March 9. Gates said the Army undersecretary, Pete Geren, will become acting secretary until President Bush nominates a permanent replacement.
Meanwhile, Mr. Bush on Friday ordered a comprehensive review of conditions at U.S. military and veteran hospitals. The White House said the president will name a bipartisan commission to assess whether the problems at Walter Reed exist at other facilities.
CBS News White House correspondent Jim Axelrod reports that a former Pentagon official close to President Bush described him as so angry that "his hair was on fire." But the decision to fire Harvey was made by Gates, not the president, Axelrod adds.
The action came after The Washington Post documented squalid living conditions for some outpatient soldiers at Walter Reed and bureaucratic problems that prevented many troops from getting adequate care.
Mr. Bush devoted his weekly radio address — to be broadcast on Saturday — to the problems of veterans' care, and the White House took the unusual step of releasing excerpts in advance. A full text also was to be released later Friday. The administration's response came amid growing outrage about the poor treatment of some veterans — and the prospect that it could backfire on the White House.
"One of my most solemn experiences as president is visiting men and women recovering from wounds they suffered in defense of country," Mr. Bush said in his prepared address. "Spending time with these wounded warriors is also inspiring because so many of them bring the same courage they showed on the battlefield to their battle for recovery."
On Thursday, the Pentagon announced the, the commander of Walter Reed. Gates had virtually ordered Harvey to fire Weightman, Martin reports.
In a brief announcement, the Army said service leaders had "lost trust and confidence" in Weightman's leadership abilities "to address needed solutions for soldier outpatient care." It said the decision to fire him was made by Army Secretary Francis J. Harvey.
Martin reports the investigation could well go both up and down the Army chain of command – up to the Army Surgeon General (who earlier in the war was the commander at Walter Reed) and down to the officer in charge of outpatient care.
Weightman's was the first head to roll but probably not the last, Martin says.
Mr. Bush, in his radio address, said he had asked Gates to make a firsthand assessment of conditions at Walter Reed. "He confirmed to me there are real problems at Walter Reed and he has taken action to hold people accountable, including relieving the general in charge of the facility.
"As we work to improve conditions at Walter Reed, we are also taking steps to find out whether similar problems have occurred at other military and veteran hospitals," the president said.
"We will use the commission's recommendations as part of our ongoing effort to improve our service to our nation's veterans," Mr. Bush said.
The commission to be named by Mr. Bush is separate from a review panel appointed by Gates to investigate outpatient care at Walter Reed and the National Naval Medical Center in Bethesda, Md. The presidential panel will look at all U.S. military and veteran facilities, according to White House deputy press secretary Dana Perino.