No reason was given for the dismissal, but the move comes just two months after the president said work permits were being issued to undeserving foreigners without due process being followed.
A statement issued by State House on Monday said President Magufuli has appointed Gabriel Malata as the new Labour Commissioner in the Ministry of Labour, Employment, Youth and the Disabled.
Malata previously served as a principal state attorney and assistant director in the Attorney General's Chambers.
"Malata replaces Hilda Nkanda Kabisa whose appointment has been revoked," the president's office said in a statement without giving details.
President Magufuli first appointed Kabisa as Labour Commissioner in March 2016. She previously worked as an assistant director in the President's Office, Public Service Management.
State House said Magufuli also dismissed the Permanent Secretary in the Ministry of Health, Community Development, Gender, Elderly and Children, Sihaba Nkinga, replacing her with Dr John Kiang’u Jingu.
Jingu previously served as a lecturer in political science and public administration at the University of Dar es Salaam (UDSM).
Magufuli ordered the newly-appointed Minister for Home Affairs, Kangi Lugola, in July to work closely with the Ministry of Labour, Employment, Youth and the Disabled to tackle fraud in the issuance of work permits.
The president said work permits were being loosely issued to foreigners contrary to regulations.
There have long been complaints of corruption and other irregularities in the issuance of work permits in the country.
The government recently introduced an online work permit application process and launched a new initiative were decisions on work permits are uploaded on the Labour Ministry’s website.
The ministry’s website has posted several lists with names of individuals to indicate the status of their applications and clearly indicated which work permits have been granted, rejected or deferred.