Ms Guthrie started in the role in May 2016 and has battled internal tensions, a frosty relationship with the Coalition government and a tightening budget - at the same time as the ABC embarks on an ambitious bid to digitise its future.
Guthrie went on to say while her contract, which was set to conclude on July 4 2021, can be terminated without immediate effect and without cause, she felt there was "no justification" for use of the clause.
Appearing on ABC television on Monday, Mr Milne refused to detail the "ins and outs" of why the managing director was sacked, but said the board wanted a different "leadership style".
"In resolving to seek fresh leadership, the Board's foremost consideration was the long-term interests of our own people and the millions of Australians who engage with ABC content every week", Justin Milne said.
Deputy Labor leader Tanya Plibersek was "perplexed" by the decision and wants an explanation from the ABC.
Australia joins bid to rescue injured Indian sailor in remote ocean
Organisers said the executive jet from Perth would reach the area of the yacht on Sunday. Other racing yachts may be able to check on the yacht in the meantime.
"This decision has been driven by our commitment to deliver the best possible outcomes for our loyal audiences and the best possible experience for our own people", he added. "In the first two years of my five year term, I have invested more in investigative journalism, more in regional journalism, more in innovative content and increased the efficiency and effectiveness of the ABC", she said. "I am considering my legal options", she said. She came under fire in March after it was rumoured she was cutting 200 journalists' jobs in a massive restructure of the company, with the mass redundancies confirmed in the months afterwards.
"It doesn't always work out. So, in this case the board decided that it wasn't working out and decided that we should do a reset and that is what we have made a decision to do", he said.
ABC managing director Michelle Guthrie has been sacked.
David Anderson, ABC director, entertainment & specialist, has been invited by the Board to serve as acting managing director until the role is filled.
The secretary of the ABC section of the Community and Public Sector Union, Sinddy Ealy, said the board had done the right thing.