Zhao, 69, is believed to have been stripped of power because he opposed senior leader Deng Xiaoping's decision to use troops to quell student demonstrations in Beijing.
The communique, issued after a meeting of the party's Central Committee, said Zhao had "unshirkable responsibilities" for the recent political turmoil following huge pro-democracy demonstrations in the capital and many other Chinese cities.
It accused Zhao of supporting the turmoil and splitting the party.
The communique said Zhao was dismissed as general secretary, member of the 17-member Politburo and its five-man Standing Committee, member of the 175- member Central Committee and first vice chairman of the Central Military
The communique said nothing about leveling criminal charges against Zhao for his alleged support of the "counterrevolutionary rebellion" the government put down with a bloody military assault on Beijing nearly three weeks ago. At least 27 people have been executed since the crackdown began.
The Central Committee also decided to remove Hu Qili, 60, from the Politburo Standing Committee. Hu is considered a moderate who opposed the introduction of martial law in Beijing.
Meanwhile, at least 20 more pro-democracy students and their supporters were arrested yesterday, and the army's propaganda chief took over as editor- in-chief of the People's Daily, the Communist Party's official paper.
The change in editors comes as a campaign is under way to blanket China with propaganda justifying the harsh suppression of pro-democracy activists.
More than 1,700 people have been arrested, and 27 executed, since a nationwide crackdown began almost three weeks ago.
Night-shift workers were ordered to make sure they carried their work identification papers today because police planned to step up their search for protesters, a Chinese source said.
At the People's Daily, the paper's foreign affairs office said today that Shao Huaze, director of the Propaganda Department of the People's Liberation Army, replaced Tan Wenrui as chief editor of China's leading paper.
It said director Qian Liren also left his post and was replaced by Gao Di, a senior official in the Central Party School of the party Central Committee.
Bot Qian and Tan resigned because of health, the office said, without elaborating and without specifying when the changes took place.
Today, much of the the People's Daily front page was filled with excerpts of speeches by senior leader Deng Xiaoping going back to 1979. In them, Deng said China can never abide drifting toward adopting Western ideas and culture and must strictly adhere to Communist Party rule.
The shuffle at the paper came as the party stepped up its drive to brand participants in the now-crushed student pro-democracy movement as counterrevolutionaries and justify the arrests and summary executions of protesters.
It also appeared aimed at revamping the leadership of the official media. Hundreds of journalists from all major national dailies and broadcasting stations participated in pro-democracy marches, and for a brief time in late May the official press was freer than it had ever been.
The press quickly reverted to being an organ for government and party propaganda after the June 3-4 military drive to quash the democracy movement that left hundreds, and perhaps thousands, of unarmed people dead.
Early yesterday, there was heavy activity by security forces in northern Beijing, where several shots were fired and the smell of tear gas filled the air, residents said.
There were unconfirmed reports that the Communist Party's Central Committee had opened a meeting in Beijing to deal with party chief Zhao Ziyang and propaganda head Hu Qili, who apparently have been stripped of power.
The party was expected to act to oust them officially from their posts and the party for expressing sympathy for demands for a freer society.
Top leaders were absent from TV news reports, and a large number of soldiers checked all vehicles on Beijing's main avenue last night, fueling speculation about a committee meeting.
Soldiers crushed seven weeks of student-led demonstrations when they marched into Beijing on the night of June 3-4 and cleared Tiananmen Square of thousands of protesters.
The Xinhua News Agency has said nearly 100 soldiers and police died and that thousands were injured in the subsequent crackdown, while about 100 civilians died and nearly 1,000 were injured. Chinese witnesses and Western intelligence sources said the death toll may have been as high as 3,000.