ORNGE president and CEO Chris Mazza, who was paid $1.4 million a year, will be replaced with a top bureaucrat on an interim basis, and the entire board of directors at the agency will also be replaced.
However, the government couldn't say how much severance it will have to pay Mazza, who went on indefinite medical leave days after his salary was made public.
It also couldn't say if he's still being paid while on medical leave.
"That will be a concern of the new board as it becomes operational, and these arrangements will be worked out," said Health Minister Deb Matthews.
"He’s not my employee. He’s an employee of ORNGE."
The NDP called for the immediate release of all documents at ORNGE, including severance payments for Mazza.
"If we’re going to clean house we can’t sweep the facts under the rug," said New Democrat Jagmeet Singh.
"Families have a right to know the details of what’s been happening at ORNGE, and how many of our health dollars will be spent on severance packages for outgoing CEOs."
The Progressive Conservatives said the government ignored opposition complaints about ORNGE for months, acting the same way it did when a scandal broke at eHealth Ontario over untendered contracts and expense account abuses.
"I don’t know if this government is completely ignorant or completely uncaring and in order to clean up whatever mess comes along, we have to be the ones that discover it," said Tory Peter Shurman.
"I see this is yet another incompetent health minister misstepping and doing a job badly."
Matthews also couldn't say if more executives as ORNGE will be fired, but left the door open to that possibility.
"I can’t speak to that right now. There are decisions that will follow," said Matthews.
"What is important today is that it is a complete change of leadership at ORNGE."
The high salaries paid to Mazza and at least five other top executives at ORNGE were not on the government's annual list of public sector employees earning over $100,000 a year, although 119 other workers at the agency did make the sunshine list in 2010.
"The salary certainly was what got our attention in the beginning," said Matthews.
The government said all salaries at ORNGE will be subject to public disclosure from now on.
ORNGE will also have to wind up its for-profit side businesses such as ORNGE Peel, ORNGE Global Air and ORNGE Global Real Estate, and operate as a non-profit entity, added the minister.
"It wasn’t clear what private money was funding and what public money was funding, and that was why I sent in the forensic audit team," said Matthews.
Deputy minister of government services Ron McKerlie will be the interim president and CEO at ORNGE, which will also have to negotiate a new service contract with the province.
The change in leadership comes after the auditor general and the ministry of finance both sent audit teams into ORNGE, which receives about $140 million a year in provincial funding to operate the air ambulance service.
"Ministry officials and the auditor general’s officials had a number of questions they were asking of ORNGE, but they were not getting the answers they felt they were entitled to," said Matthews.
The New Democrats said the government has known about troubles at ORNGE for years and did nothing to address the situation.
"The Liberals created the mess at ORNGE, helped cover up the growing controversy, and now they’re still hiding the facts from the public," said Singh.