Helen Gilchrist, principal of Bury College, and, since last July, deputy chair of the Association of Colleges, is believed to have been appointed acting chief executive. Governors are hoping to appoint a permanent chief executive by September.
The decision to dismiss Mr Eade follows a report from a college committee convened to consider his position. He has also resigned from the Further Education Funding Council, citing ill-health.
Roy Hilton, chair of governors had told staff that the college was making arrangements for an interim chief executive, who would be a respected individual from another college.
"We hope to be able to announce a name very soon, but staff will understand that it does take time to negotiate the loan of a college head."
In fact, Mrs Gilchrist was interviewed this week and FE Focus understands that she has been offered the job.
Last month Barnsley suspended on full pay acting principal Michelle Squires, and clerk Ann Oldroy, while the FEFC carried out an investigation into its financial affairs. The council is to carry out a forensic audit of some aspects of the college's business, and the governors are giving their full support and co-operation. The investigation is being overseen by the National Audit Office.
Mr Hilton said: "We are acutely aware of the difficulties that all the staff face in the current climate of uncertainty, compounded by the various inquiries that have been going on into aspects of the college's affairs.
"We are very grateful for staff efforts to maintain services to our students, which must be the priority for all of us. Regrettably, it will be some time before the inquiries are complete."
Ian James has been appointed as interim clerk. He currently works for several other colleges. Governors have also decided to increase their numbers from 12 to 15.
Auditors are looking at the relationship between the college and a company, Progress Training, which was established to provide franchised courses. The company collapsed last year with debts of pound;350,000. Other companies set up by the college are also being scrutinised.