Scunthorpe shareholders have voted in favour of the removal of Dennis Hobson from the board of directors.
Sheffield-based boxing promoter Hobson, who joined the club's board in January, was given verbal assurancesby fellow directors that he would be appointed as successor to former chairman Steve Wharton, who retired at the end of the season.
But the club reneged on their verbal agreement and appointed former Gainsborough Trinity chairman Peter Swann in May.
Hobson was initially asked to remain on the board as a director, but at an emergency general meeting at Glanford Park on Monday night more than 98 per cent of the club's shares represented at the meeting backed the decision to sack Hobson.
Director Keith Wagstaff told the meeting: "We had promised the chairmanship to Dennis, but we had someone we knew very well who was far better for the job.
"It was a very difficult few minutes, but the decision was to tell Dennis Hobson we wanted Peter Swann as chairman.
"Did we break our word? Yes. Would we do it again? Yes. It wasn't the best thing thing we ever did, but it was the best thing to be done for SUFC."
Swann, who had already shaken hands on a deal to join the board at Lincoln, said: "We still wanted Dennis Hobson on the board as a director. I eventually had a meeting with Dennis for an hour.
"Several things were said in the press. We were very unhappy with his radio interview. One director received threats of financial ruin and of ruining the club.
"I haven't spoken to him since May. He has not turned up to one meeting. The relationship between the board and Dennis Hobson is untenable. I was hoping he would be here but he refused without his legal representative."
Swann revealed plans to invest £250,000 in the club in December - he needs a resolution passing at the club's annual meeting earlier that month to allow it - as well as a further £250,000 before the end of the season.
"This can only be done with the removal of Dennis Hobson as director," he added.
Hobson refused to attend the meeting without his legal representative and in his absence the club's Supporters' Trust voted to abstain rather than vote for or against the decision.