The body, the Constituent Assembly, made the sacking of Luisa Ortega its first order of business since it was elected in a widely condemned vote a week ago.
It also said Ortega would face trial for “irregularities” from her time in office.
Ortega, who was barred by dozens of soldiers from entering her offices, said she refused to recognize her sacking, or the assembly’s swearing in of Tarek William Saab, the national ombudsman, in her place.
“I am not giving up, Venezuela is not giving up and will not give up against barbarity, illegality, hunger, darkness and death,” she said.
Ortega has been a thorn in Maduro’s side for months, breaking ranks with him over the legality of the Constituent Assembly.
One of the assembly’s most prominent members, Diosdado Cabello, said of the firing, “This is not a personal, political lynching, just carrying out the law.”
But Colombia, Chile, Guatemala, Mexico, Peru, and Canada all immediately slammed the decision, which some called “illegal.”
“The first action of the constituent assembly has been to further dismantle Venezuela’s separation of powers and democracy,” Canada’s foreign ministry said on Twitter.
Ortega’s sacking had been widely expected. But its swiftness – and the fact it was a unanimous vote – stirred wide unease.
Maduro and his Socialist party have “completely taken hostage” Venezuela’s institutions through “an undemocratic mechanism that is utterly dictatorial,” the leader of the opposition-controlled legislature, Julio Borges, told reporters.
As Ortega’s firing was being announced, Argentina, Uruguay, Paraguay, and Brazil declared Venezuela was indefinitely suspended from the South American trading bloc Mercosur for its “rupture of the democratic order”.
The international onslaught added to US sanctions imposed on Maduro after the Constituent Assembly’s election.
Maduro responded in an interview with an Argentine radio station that “Venezuela will not be taken out of Mercosur – never!”
He accused his Argentine counterpart, Mauricio Macri, of trying to impose a “blockade” on Venezuela and US President Donald Trump of wanting to grab the country’s vast oil reserves.
Trump’s national security advisor, H.R. McMaster, this week ruled out foreign military intervention and said Washington did not want to give Maduro a pretext for blaming the US for his mounting woes.
The country’s economic and political crisis, he said, is “on Maduro’s shoulders,” he said, calling Venezuela an “authoritarian dictatorship.”
The United States, the European Union and major Latin American nations including Mexico, Argentina and Chile have all rejected the Constituent Assembly.
The body’s legitimacy was struck a hard blow this week when a British-based firm that supplied the voting technology, Smartmatic, said the turnout figure was “tampered with” and greatly exaggerated.
The principal task of the Constituent Assembly is to rewrite the constitution, something Maduro promised will resolve Venezuela’s troubles.
“We are going to win back peace,” the president said.
While working on its mission, the assembly holds supreme powers over all other branches of government.
Initial suggestions were that it would need only six months to complete its work.
But it announced on Saturday that it would stay in place for up to two years – beyond the end of Maduro’s term, due to end in 2019.
Its 545 members, including the president’s wife and son, are all Maduro allies because of an opposition boycott during the vote.
It is led by Maduro’s fiercely loyal former foreign minister, Delcy Rodriguez, who branded Colombian President Juan Manuel Santos a “usurper” for calling the assembly “illegitimate.”
The opposition has vowed to maintain street protests against the assembly.
Four months of demonstrations violently matched by security forces have left at least 125 people dead.
But the rallies grew more muted this week as the assembly vowed to go after those seen as inciting street action.
Maduro has around 20 percent public support, according to surveys by the Datanalisis polling firm.
Ordinary Venezuelans are struggling, with food, essentials and medicine scarce, the currency rapidly depreciating, and inflation soaring. Thousands have sought shelter in neighbouring countries, particularly Colombia and Brazil.