The anticipated downfall of Pierpoint was rubber-stamped at an extraordinary general meeting held at Donington Park, although he will for the time being continue in his paid role as City's chief executive.
It means a return to power for Leicester's club chairman, John Elsom, and plc chairman, Sir Rodney Walker, who were voted back on to the board.
Pierpoint's future looked doomed after the proxy vote for the EGM revealed that Elsom and Walker had secured more than the 51 per cent of the vote needed to win the fight.
That prompted the fellow directors and other so-called "Gang of Four" members, Roy Parker, Gilbert Kinch and Phil Smith, to resign on Monday.
Pierpoint's removal finally brings an end to an often bitter dispute which flared up when the four seized power after claiming Elsom and Walker had resigned at a board meeting in September.
The duo had constantly denied that claim although Walker was still sent a letter instructing that he was no longer welcome in the director's box.
But the writing was on the wall for Pierpoint and the rebel directors once O'Neill had pledged his support to Elsom and Walker, amid fears that he would resign if they were not returned to power.
Elsom, whose supporters included one of Leicester's most famous sons in Gary Lineker, instigated the EGM after the four men rejected his calls for them to step down. The former Leicester chairman Martin George, who appointed O'Neill four years ago, is now expected to return to the new- look board.
O'Neill insisted after Monday's resignations that he would now be honouring his contract, which runs until 2002.
It was reported yesterday that a takeover bid for Crystal palace has collapsed. A group of directors have withdrawn their pounds 9.5m rescue package after failing to receive assurances over projected losses for the current season.
The offer was one of two being considered by administrators. A meeting with the club's creditors was cancelled yesterday, with a meeting schedule for 5 January to discuss the remaining offer, from a group led by the Malaysian businessman Jerry Lim. Palace are due to meet the League today.