Hanoi gave little information about Thuong's resignation from the largely ceremonial role of president, saying only that he had violated party rules. He had been in office for just a year.
Vice President Vo Thi Anh Xuan was appointed as acting president on Thursday, but it was unclear who would take the post on a permanent basis.
The National Assembly approved Thuong's resignation Thursday, following a decision by the party's powerful Central Committee the day before.
Thuong had visited Japan in November, meeting with Emperor Naruhito and Empress Masako as well as Prime Minister Fumio Kishida. The two leaders elevated diplomatic relations between the two countries to the highest level.
The party has been waging a campaign against corruption that has taken down a number of high-ranking officials and business leaders. Even in the Politburo, the party's most powerful body, four members including Thuong have lost their seats since the end of 2022.
Thuong, who became president in March 2023, is still in his early 50s. His career has some similarities with that of Vietnam's top leader, General Secretary Nguyen Phu Trong. Both held key positions within the party but have not served in the cabinet.
Trong is said to have favored the presidency of Thuong, who quickly emerged as a future candidate for general secretary. This amplified the shock of Thuong's resignation.
Vietnam appears to be experiencing a power struggle heading into the 2026 Communist Party National Congress, a gathering held every five years.
Trong is in a rare third term as general secretary. With the possibility of a new general secretary for the first time in 15 years on the horizon, some factions within the party may want to stop Thuong's rise. Corruption allegations are good ammunition for taking down rivals.
Some see Thuong's fall from grace as a sign of Trong's waning influence. The 79-year-old Trong, a hard-core adherent to Communist Party principles in office since 2011, has thwarted political rivals pushing for market reforms, including former Prime Minister Nguyen Tan Dung. But he is rumored to have health problems and has drastically reduced his public appearances.
A power struggle could discourage investment by global companies in Vietnam, part of whose attractiveness as a destination for capital lay in political stability. Thuong is the second president to leave office in as many years.
The Communist Party is "using the pretext of fighting corruption" to create infighting, said Ha Hoang Hop, an associate senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.
A delegation of around 60 U.S. companies, including Boeing and Facebook parent Meta, traveled to Vietnam this week. Prime Minister Pham Minh Chinh had urged them to invest in Vietnam on Tuesday, before Thuong's resignation came to light.