"Mohammad Ashraful has been removed from the captaincy because of poor batting," an official, who declined to be named, told AFP via telephone.
The 24-year-old middle order batsman bore the brunt of the blame for the team's disastrous performance in the competition in England which saw them exit after the first round of play.
Fans gathered at Zia International Airport in Dhaka and chanted "resign, resign" to Ashraful, prompting him to publicly apologise for their poor play but he said he would not quit as captain.
His deputy Mashrafe Murtoza, a fast bowler, would be named new captain, the official said.
Bangladeshi Cricket Board spokesman Jalal Yunus told AFP an official announcement would be made Tuesday.
Ashraful was appointed to the role two years ago but the team has failed to make an impact the world scene under his captaincy.
He replaced Habibul Bashar, a decade older than him, with authorities promising a "new era" of performance in the cricket-mad but under-performing South Asian nation, which got Test status eight years ago.
In England this month, the team had hoped to repeat or better their performance in the previous World Twenty20 tournament when they made it through to the final eight teams.
However, Bangladesh lost to both India and Ireland in the first round of play this month which saw them fly home.
Ashraful himself, considered one of the team's best players, made only 11 and 14 runs in the two matches.
The team's Australian coach, Jamie Siddons, criticised Bangladeshi players for refusing to listen to his guidance and for "ridiculous" batting in the tournament.
In 2001, Ashraful became the youngest centurion in Test cricket's history and in the last World Cup in 2007, he was the highest scorer for Bangladesh.
He has often come under fire for performing below his potential since making a dream debut against Sri Lanka in 2001.
His biggest achievement during his two years as captain was a maiden one-day victory over New Zealand last October in Dhaka.
When 13 players signed with the unauthorised Indian Cricket League in the same month, Ashraful said he had been offered but rejected an offer of 2.1 million dollars to play for three years in the ICL.