Dave Anderson, director of city development, has been told disciplinary proceedings have begun against him, the Scotsman newspaper has reported.
But the council refused to discuss these with the press, merely saying an investigation into "managerial matters" was due.
Mr Anderson was initially put in charge of investigating a large volume of complaints into the statutory repairs service for historic buildings, which he had previously had responsibility for running.
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The service is now at the centre of a corruption probe and police investigation after the cost of repairs boomed from £9.2m in 2005 to about £30m in 2010.
Allegations of corruption in the property repairs service go back to 2007, the year before Mr Anderson started work there.
It is alleged contractors were used without being on an approved list, residents were overcharged for unnecessary work, and council staff received unofficial payments and hospitality.
Independent consultants have been preparing a multimillion pound report on the scandal since 2010 - but this will not be made fully public at least until a criminal investigation by Lothian and Borders Police is complete.
Some current or former council staff may face criminal charges and eight have already been sacked in connection with the allegations.
Mr Anderson has an annual salary of £123,525. Some months ago, he was stripped of his key responsibilities in planning, transport, building standards and public safety.
(NE)
