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The ex-minister, who represents Bari assembly seat, was suspended by BJD President and Chief Minister Naveen Patnaik, party sources said.
Unhappy over senior BJD MLAs airing their views on various issues in public, Patnaik had on Friday warned partymen to maintain discipline.
Patnaik`s words came a day after Nayak`s reported statement accusing the party President of not performing upto the expectations of people.
Nayak was not available for comment after the suspension move.
Nayak, who had been dropped from the ministry during BJD`s second tenure between 2004-2009, said earlier "Patnaik must function democratically."
Nayak`s remark came days after senior BJD MLA Damodar Rout alleged that the CM was implementing party MP Pyari Mohan Mohapatra`s agenda instead of taking own decisions.
Patnaik, however, termed Nayak`s allegations as "false" and asserted to "look into" the matter.
Patnaik also rejected notions that there was growing dissidence within BJD as Nayak was the second senior leader who went public voicing dissatisfaction over functioning of the government as well as the party.
Nayak`s remarks also drew criticism from several senior BJD leaders including ministers who accused him of making public utterances in the aftermath of his failure to secure a berth in the Patnaik ministry.
