0824 GMT May 20, 2019
Vice Admiral Joseph Aucoin was relieved "due to a loss of confidence in his ability to command", a navy statement said, AFP reported.
The navy is undertaking a fleet-wide global investigation after Monday's incident involving the USS John S. McCain, which left 10 sailors missing and five injured after a gaping hole was torn in the warship's side.
The Seventh Fleet, headquartered at Yokosuka in Japan, is the centerpiece of the US military presence in Asia, undertaking sensitive missions such as operations in the South China Sea and around the Korean peninsula.
Aucoin, who had held the post since September 2015, had been in the navy for almost four decades and US media reports said he had been due to retire in weeks.
He was replaced by Rear Admiral Phil Sawyer.
Monday's accident was the second fatal collision in two months – both involving ships from the Seventh Fleet – after the USS Fitzgerald collided with a cargo vessel off Japan in June, leaving seven sailors dead.
There have been four accidents in total in the Pacific this year involving American warships, sparking concerns the US Navy could be overstretched.