King Salman issued a decree on Saturday ordering his dismissal and replacement in the interim by Agriculture Minister Abdel Rahman al-Fadli, said the official SPA news agency.
His removal comes after the government reduced subsidies on electricity, water and other services.
In March, the Arab News daily reported that Hussayen had called on citizens to get permits to dig their own wells in the face of increasing complaints about high water bills.
And earlier this month the newspaper said that the advisory Shura Council “appeared unconvinced” when its members grilled Hussayen and his officials about the bills.
In December, a series of unprecedented reforms were adopted in the desert kingdom, which has been hit hard by the steep fall in global oil prices over the past two years.
Crown Prince Mohammed bin Salman, who is seen as the architect of the reforms, is to set announce on Monday a programme aimed at diversifying an economy that depends on oil for 70 percent of state revenues.