Jim Jordan was ousted by the Massachusetts senator and his campaign chair, Jeanne Shaheen, the former governor of New Hampshire, and replaced by longtime Democratic operative Mary Beth Cahill.
Sources said that Jordan was told by Kerry the reason he was dismissed was because changes were needed in the campaign.
"From the bottom of my heart, I thank Jim Jordan for his leadership, extremely hard work, unsurpassed loyalty and devotion to me, to this campaign, and to the people who have worked with him," said Kerry in a statement. "I've asked Jim to continue in his role as Senior Strategist as we enter this critical phase of the campaign."
It's "unclear whether Jim will accept the position" to stay with the campaign, a source tells CBS News.
Cahill has worked for Emily's List, a lobbying group on behalf of women's political issues and currently is chief of staff for Sen. Edward M. Kennedy, D-Mass.
Jordan, a well-known Democratic operative, was a spokesman for the House Judiciary Committee during the impeachment of then-President Bill Clinton. He also worked on the Senate committee that investigated political fund-raising scandals in the 1990s and the 1996 campaign that elected Tim Johnson of South Dakota to the Senate.
Jordan, former head of the Democratic Senatorial Campaign Committee, helped build Kerry's presidential campaign and positioned the senator as an early front-runner in the 2004 Democratic sweepstakes.
However, the candidate and his campaign were slow to respond to surprise surge of former Vermont Gov. Howard Dean. Kerry has been contemplating a shake up for several weeks.
Kerry, an 18-year veteran of the Senate, is third in most polls in Iowa, where the nation's first presidential selection caucuses will be held, and trails Dean by a double-digit margin in New Hampshire, a must-win state for both men.
The change comes days after Dean solidified his grip on the front-runner status by securing two highly coveted union endorsements — from the Service Employees International Union and the American Federation of State, County and Municipal Employees, and abandoned the U.S. public finance system — along with the spending limits that come with it.
Kerry's whose wife is the heiress of the Heinz ketchup fortune, is expected to announce this week whether he will follow suit and invest his family's money in his bid for the White House.