Aziz was suspended "with immediate effect for a period of ninety (90) days for fair conduct of inquiry under section 96, sub-section (1) of Islamabad Capital Territory Local Government Act, 2015 (X of 2015)", said the notification.
The Cabinet approved a summary of the Islamabad mayor's suspension through circulation in order to conduct a free and transparent inquiry against him.
The notification was issued by Joint Secretary Home Ministry Irfan Anjum.
Mayor Aziz, however, termed the claims against him as "baseless".
Responding to the development, he said: "I was immediately suspended over baseless allegations. There are serious allegations of corruption against the PTI's ministers, MNAs, parliamentary secretaries.
"The PTI government did not suspend or remove anyone over the 'sugar scandal'. They played with people's lives in the medicine scandal and yet again, the PTI government did not remove any of its ministers," he added.
Aziz claimed that he was removed "in retaliation for my affiliation with PML-N".
Earlier this year, a reference had been filed against Aziz — who is affiliated with opposition party PML-N — in which it was alleged that he was abusing his powers, using staff for personal use, and operating official vehicles that were reportedly beyond his entitlement.
The reference was filed by Humayun Akhtar, a member of the Capital Development Authority (CDA) and the acting Chief Metropolitan Officer (CMO). A local government commission led by PTI lawmaker Ali Nawaz Awan had recommended Aziz be suspended during the course of an ensuing investigation.
MNA Awan is also the Special Assistant to Prime Minister Imran Khan on CDA Affairs. The matter appeared to be a political tug of war between the PTI and the PML-N.
Mayor Aziz, however, had challenged the reference in a petition to the Islamabad High Court, claiming the accusations against him were politically motivated. He had informed the court that despite a legal delegation of power to the Metropolitan Corporation Islamabad (MCI), many of the functions had not been transferred by the CDA and the chief commissioner office to the MCI.
Aziz had also alleged that the ruling PTI had paralysed union councils in Islamabad and that MNA Awan had brought up challenges for the mayor soon after being appointed the head of the commission that filed the reference against him.
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