Annan concluded Stephanides, of Cyprus, committed "serious misconduct," U.N. associate spokesman Stephane Dujarric said.
"Mr. Stephanides was advised accordingly yesterday and was separated from service with immediate effect," Dujarric said.
"The Secretary General is making of point of cleaning up shop as soon as he has evidence of wrongdoing," said CBS News Foreign Affairs Analyst Pamela Falk from the U.N. "The Stephanides case was presented in March and time was given for him to present his defense."
"But time will tell if taking the reins will clear the Secretary General himself in the intense Senate and Department of Justice investigations," added Falk.
Stephanides rejected the charges and said he was confident the firing would be overturned. He said he planned to appeal.
"I am very disappointed by this decision," Stephanides told The Associated Press. "I look to the appeal process in the confident hope that justice will be made and I will be exonerated because I have committed no wrongdoing."
Stephanides had worked for the United Nations since 1980. He said he had planned to retire in September when he turned 60, the mandatory retirement age.
An independent probe led by former U.S. Federal Reserve Chairman Paul Volcker had accused two other U.N. staff members of wrongdoing in the $64 billion program oil-for-food program.