David Crompton was suspended by the region's Police and Crime Commissioner (PCC) after the Hillsborough inquests due to "eroding trust and confidence" in the force.
Dr Alan Billings has said he will enforce the decision to make him resign.
Mr Crompton said it was "fundamentally wrong" and would challenge it in court.
He said: "I will shortly be commencing judicial review proceedings in the High Court in order to challenge him."
Dr Billings said the force needed a new start under new leadership and had accepted the Police and Crime Panel's recommendation calling on the chief constable to resign with immediate effect.
"This is due to the erosion of trust and confidence in his leadership which would have continued and intensified as long as he remained in post," he said.
"This would not have been in the interests of South Yorkshire police or people."
Mr Crompton was suspended in April after an inquest jury concluded police conduct contributed to or caused the 1989 Hillsborough disaster, which resulted in the deaths of 96-football fans.
In May, solicitors acting on behalf of 20 bereaved Hillsborough families submitted a complaint to the Independent Police Complaint Commission (IPCC) about Mr Crompton's conduct during the inquests.
Mr Crompton said the force's approach was not to try and defend its failures but to put them "into the context of other contributory factors".
A report by the South Yorkshire Police and Crime Panel published last week described his attempt to explain the legal approach as "a catastrophic error of judgement" and gave it's backing to the PCC's decision.
Dr Billings' decision, however, was described by Chief Inspector of Constabulary Sir Tom Winsor as "conspicuously unfair and disproportionate".
Following the inquests, Mr Crompton reiterated an apology for the disaster and said he accepted the findings.
However, he was criticised by the families of Hillsborough victims and Andy Burnham MP over the force's stance during the two-year-long hearings.
Mr Burnham said the force had effectively gone back on its 2012 apology and that its approach to the inquests had resulted in "millions of pounds of public money [being] spent retelling discredited lies" and had significantly lengthened the hearings.
David Crompton
The Chief Constable of South Yorkshire Police is to take legal action over the decision to ask him to resign.