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

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

The government last week followed through on its designs to dilute the power of Ukraine's ultra-rich businessman 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 offices of two energy companies in the capital, Kiev.

The episode is threatening to sow renewed political instability in Ukraine, which is struggling with a Russian-backed separatist conflict in eastern regions neighboring Dnipropetrovsk and a sinking economy.