The Toronto Community Housing Corporation's board of directors was official dissolved on Thursday after a call to dismiss its four remaining members passed during a late-night council meeting.
Council voted 25-18 in favour of immediately dissolving the board of directors and installing a managing director to govern the agency through a transition phase.
The decision appears to put an end to a weeks-long battle over the public housing agency, which found itself embroiled in a spending scandal following the release of an auditor's report.
"This is the first step we've taken to restore confidence back in the Toronto Community Housing and the tenants are going to be happy. It is another huge victory for the taxpayers," Mayor Rob Ford told reporters during a brief press conference held shortly after midnight.
Most of TCHC's board members resigned last week after an auditor's report revealed between $4 million and $10 million was wasted on sole-sourced contracts.
The report also revealed issues with record-keeping at the agency and found that $200,000 was misspent on luxury chocolates, spa trips and a Christmas party.
Two councillors and two tenant representatives had refused to resign from the board.
Former councillor Case Ootes, who led Ford's transition team, will be installed as the TCHC's managing director, a position he will hold until a new board is elected. Ford has previously said an election could be held within a month, adding on Thursday that a June vote was the "worst-case scenario."
Ford would not confirm Ootes was to be appointed as the managing director, nor could he say what salary he would receive.
"We are not going to have someone come in here and do it for free. If people work you deserve a paycheck," Ford told reporters.
Coun. Gord Perks said the vote result was "awful" for several key reasons.
"There was almost nothing right about what we did tonight," he said, adding that City Hall "denied" tenants the chance to weigh in.
"We debated the issues without having the information in front of us. We wouldn't even let the alternate tenant (representatives) that have already been elected go onto the board."
Perks added that no new accountability measures have been put in place to prevent any misallocation of funds in the future.
"All we did was get rid of a bunch of people that Rob Ford doesn't like, and put one of his friends in charge of 168,000 people's homes and $6 billion -- with no accountability. It's awful."
The appointed managing director will hold complete authority over the TCHC and have the ability to fire embattled CEO Keiko Nakamura, who has refused Ford's calls for resignation.
Coun. Maria Augimeri, one of two council representative removed from the board, said she was feeling "a little bit bruised but not battered" following the vote.
"It was very close, it goes to show that once members of council and as the public are informed about the truth of a situation that they will come around and see," she told CTV Toronto Thursday morning. "The mayor's initial reaction was explosive in nature and opened the city up to great risk."
Ousted tenant representative Dan King said the board was not responsible for the misspending and were being arbitrarily dismissed by council.
"We have a lot of faith in Toronto housing and I think the work we are doing is very important," he told reporters. "We have worked hard to be accountable to our board and to dig deep for the answers that we are looking for. We'd like to be judged by our work."
With a report from CTV Toronto's Alicia Markson
