Ukrainian president Petro Poroshenko dismissed the billionaire governor of an eastern region Wednesday following a rancorous dispute pitting the tycoon against the government.

Poroshenko's office said in a statement that Ihor Kolomoysky had asked to be released from his duties as governor of Dnipropetrovsk.

The government last week followed through on its plans to dilute the power of Ukraine's ultra-rich business elite by pushing a law through parliament that led, in effect, to control over an oil and gas company being wrested from Kolomoysky.

Kolomoysky reacted by ordering armed groups of men to seize the offices of two energy companies in the capital, Kiev.

The episode has threatened to spark renewed political instability in Ukraine, which is battling Russian-backed separatists in eastern regions neighboring Dnipropetrovsk, as well as a sinking economy.

Kolomoysky is a contentious figure in Ukraine — unafraid to use heavy-handed tactics in his business activities but also strongly committed to protecting Ukraine's territorial integrity.

Over the past year, he has tapped into his wealth, which Forbes magazine estimates stands at $1.3 billion, to finance volunteer battalions waging war against separatist militias. Those battalions have since been subordinated to central government control, although it is believed Kolomoysky still retains considerable sway over them.

While there is concern about how the showdown between Kolomoysky and the government could play out, many are greeting the move against him with relief.

"(His) behavior was simply a slap in the face to the legitimate authorities," said Serhiy Leshchenko, an investigative journalist-turned-parliamentary deputy.

Poroshenko said that Dnipropetrovsk should continue to serve as a defensive line for eastern Ukraine.

"We must ensure peace, stability and tranquility. Dnipropetrovsk region should remain a bastion for Ukraine in the east, to protect the peace and tranquility of citizens," Poroshenko said.

When then-President Viktor Yanukovych was overthrown last year in a mass street revolt fueled in part by anger over corruption, many hoped business would no longer continue as usual.

Chief among the figures distrusted by the public are the tycoons that earned their riches in the chaos of the post-independence period. The hyper-rich in the former Soviet Union influence politics and government more brazenly and openly than their Western counterparts, earning them the label of oligarchs.

In a move transparently designed to cut Kolomoysky down to size, the parliament last week adopted a law requiring only 50 percent of shareholders of joint stock companies to attend company meetings before decision could be taken. The threshold was previously 60 percent. Poroshenko signed off on the law overnight Tuesday, around the time he was meeting with Kolomoysky to discuss the governor's dismissal.

That measure had the most immediate ramifications for Kolomoysky, whose Privat Group conglomerate holds a 43-percent stake in oil and gas company Ukrnafta.

Although the government-owned energy company Naftogaz controls just over 50 percent of Ukrnafta, Privat Group had — until now — been able to obstruct any policies going against Kolomoysky's interests.