Ms Guthrie became the first female managing director in the ABC's history when she replaced Mark Scott in the role in 2016.
Mr Milne described Ms Guthrie as a "good networker" who "tried hard" to cultivate her relationship with the federal government, but said she could have improved in that crucial part of the job.
David Anderson who is now ABC's head of specialist and factual will stand in as the interim managing director.
While it's nice to see so many people invested in the succession plan of the entertainment industry staple, the announcement does leave us with a few questions; like why did the Board feel the public should not be told the reason behind its decision to remove Guthrie?
The sensational sacking comes as the ABC looks to seek new leadership which it asserts will "benefit the organisation, its dedicated employees, and the ABC's audiences".
In a very brief statement, Communications Minister Mitch Fifield - who has been a constant fault-finder of the ABC's political coverage - said "The government thanks Michelle Guthrie and acknowledges her service as Managing Director of the ABC for the past two and a half years in what is a challenging and rapidly changing media environment".
Liberal senator Eric Abetz, who repeatedly has attacked the ABC, demanded an explanation of Guthrie's sacking.
If it emerges that the board feels an emphasis on traditional ABC strengths - news, especially regional news - is required, it will represent a win for critics.
'This is driven by our commitment to deliver best possible outcomes for our loyal audience'. However, the ABC is fortunate to have an experienced and capable executive team that will provide continuity in the months ahead, " Milne said. "We are very grateful for all her hard work", Mr Milne concluded.
ABC managing director Michelle Guthrie has been sacked by the board. He has enjoyed a successful career in the broadcast television and media industry for almost 30 years. It has commenced a formal search process that will involve internal and external candidates. "The ABC Board has legislated independence in relation to management appointments and the Government respects the duty and role of the Board in these matters".