The unscheduled board meeting and the shock announcement sparked a buzz of speculation over the reasons for Ghosh's exit.
Ghosh said in a statement that it was time to "step off the treadmill" and "embark on the next adventure" sometime in the near future.
Bhatia said Ghosh had decided to explore the prospects of starting a new business venture. "We respect his decision to do so," Bhatia added in an internal note sent out to colleagues after the board meeting, apprising them of a "few key leadership changes that are under way at IndiGo".
Ghosh's departure signals the end of an almost 10-year tenure, during which the airline clambered to the top of the pecking order with a market share of 39.7 per cent in January-March 2018, way ahead of Air India (13.3 per cent), Jet Airways (14.7 per cent) and Spicejet (12.6 per cent). IndiGo carried 134.23 lakh passengers during that period.
The Rs 18,580-crore airline parent earned a net profit of Rs 1,659 crore in the year ended March 2017.
Gregory Taylor, who had worked at the airline, will be returning as senior adviser and will report to Bhatia.
"In the coming months, your board of directors will consider the appointment of Greg as president and CEO of the company, subject to receiving necessary regulatory approvals," Bhatia added.
Ajay Jasra, IndiGo's head of communications, has also resigned from the airline, triggering talk of an executive churn as the carrier battles a crisis. The aviation regulator has ordered the grounding of eight of IndiGo's new Airbus A320 Neo jets that were hit by a string of engine snags, forcing tens of flights to be cancelled or rescheduled and upsetting the travel plans of thousands of passengers.
Ghosh had been at the receiving end of public ire over the past year, particularly over an incident involving the airline's ground staff who thrashed and harassed a passenger boarding a flight in New Delhi. Ghosh had issued a public apology - three weeks after the incident.
While Bhatia has been a more visible face, the real driving force behind IndiGo is a reclusive, Calcutta-born Miami resident, Rakesh Gangwal, a former CEO and chairman of US Airways.
Taylor has more than 40 years of varied experience in the airline industry and held senior management roles at United Airlines and US Airways.
In his statement, Ghosh said: "I am not going away anywhere immediately. I am around for another three months, till the end of July. I am sure we will have many opportunities to meet and build happy memories."
He added: "For the last ten years, it has been a relentless, exhilarating and a most satisfying task building IndiGo. I wish all my colleagues at IndiGo the very best as they move on to the next phase of growth."
The InterGlobe stock sank over 6 per cent to close at Rs 1406.80 on the Bombay Stock Exchange, which means the market had got wind of the board shakeout before it was announced.