Mr Evans was suspended in March 1998 after police inquiries into alleged financial irregularities in information technology training projects funded by the European Social Fund during 1994 and 1995.
The police inquiry has since concluded and no charges were brought.
An independent investigation, commissioned by the college from PricewaterhouseCooper, confirmed that funding regulations had not been followed in a partnership between the college and a private IT training company.
Announcing the decision to dismiss Mr Evans, a governors' spokesman, said:
"The board emphasised that Mr Evans' personal integrity and honesty had not been called into question and acknowledged Mr Evans' contribution to the work of the college," "Governors were satisfied that Mr Evans had acted in what he perceived to be the best interests of the college and had made no personal gain. Nevertheless, the board considered his actions brought the college into disrepute, prejudiced the interests of the corporation and damaged fundamentally the trust and confidence the corporation needs to have in its chief executive."
Last April a Further Education Funding Council report said that the college's governance was "weak" and its finances "endangered" its solvency. Between July 1995 and July 1997, the reserves declined from a surplus of pound;700,000 to a deficit of pound;1 million.
Paul Mackney, chief executive of NATFHE, the lecturers' union, has called on the Education Secretary David Blunkett to investigate the management of the college.