The county council's Urgency Committee decided to suspend Phil Halsall in a meeting at County Hall.
It follows an independent review of the tender process for a contract to run the council's fleet services.
Jo Turton, the council's executive director for environment, has been appointed interim chief executive.
Mr Halsall was chief executive at South Ribble Council before leaving to become executive director of resources in 2000 at Liverpool City Council.
He joined Lancashire County Council in 2009 and was appointed chief executive in November 2010.
The chief executive of Lancashire County Council has been suspended pending the outcome of a disciplinary investigation.