Aydin Onac was suspended from his role at St Olave's Grammar School in Orpington, south London, on Thursday.
Bromley council will be investigating "concerns that have been raised over recent weeks", The Time reports.
The school found itself in the spotlight this summer when it emerged parents had threatened legal action after some sixth-formers were told they would not be re-admitted for their final year, for failing to achieve certain grades.
St Olave's, in the London borough of Bromley, is one of England's top-performing grammar schools.
A total of 16 pupils were affected by the school's policy of "grade exclusion" because they didn't achieve at least three B-grades in their first year tests.
Two families threatened the school with legal action and judicial review proceedings against the governing body of St Olave's were initiated.
However, the high-achieving school reversed its decision before a hearing took place and the legal action was dropped.
Pupils and teachers were called to a meeting on Thursday to be told about Onac being suspended which, according to The Times, was received with claps and cheers by pupils.
Rev Peter Galloway, the chair of governors at the grammar school, resigned from his role in September, although his decision to was unrelated to the scandal.
Members of the senior management will in the meantime take over running the school and its operations will be overseen by Bromley Council.
