Jang Song Thaek was likely sacked as vice-chairman of the powerful National Defence Commission and as a department head of the ruling Workers' Party, lawmaker Jung Cheong-rae said, citing a senior South Korean official with the National Intelligence Service (NIS).
Analysts who watch the North's power structure say Mr Jang's removal would not have been possible without the approval of the third Kim to rule in the family dynasty.
The move is likely to tip the balance in favour of another close aide - the top political operative for the army, which could mean a symbolic victory for the 1.2 million-strong military.
Choe Ryong Hae, director of the General Political Bureau of the Korean People's Army, has been the most prominent figure to accompany Mr Kim at public events and is a reminder of the state's political roots in military power.
There was no immediate mention of Mr Jang's fate on North Korea's KCNA news agency, the primary source of information on the impoverished country for outsiders.
Two members of the South Korean parliament's Intelligence Committee told news briefings the NIS had confirmed the public execution of two close aides to Mr Jang in the North's ruling Workers' Party for corruption.
Mr Jung, the ranking opposition member of the intelligence committee, said: "The briefing by an NIS senior official was that they believe Jang Song Thaek has lost his posts.
"Following (the executions), the NIS said it believed Jang Song Thaek has not been seen and has lost his posts."
A ruling party member of the committee held a separate news briefing and delivered a similar report.
The removal of Mr Jang, a key figure in the power transition following the 2011 death of Mr Kim's father, Kim Jong Il, could tip the balance in the fiercely competitive group of confidants surrounding the current leader but was unlikely to impact on Kim Jong-Un's hold on power, experts said.
"Jang Song Thaek is a person who at one point Kim Jong-Un had to cut out as he solidifies his own power structure," said Koh Yu-hwan of Dongguk University in Seoul, a leading expert on the North's leadership.
"I think the young elite had Mr Kim get rid of Jang, meaning that he will rule without a guardian."
Accordion-playing Mr Jang, 67, is married to Kim Jong-Un's aunt, Kyong Hui, who is a daughter of the North's founding leader and its "eternal President", Kim Il Sung.
Mr Jang, who is widely seen as an advocate of economic reform, was purged in a power struggle in 2004 under Kim Jong Il's rule but was reinstated two years later.
One key question now is what his removal will mean for the devastated economy.
"Within the current leadership, he (Jang) seems to be the face of economic reform, so there is a risk involved with removing someone that close to the programme," said John Swenson-Wright, a senior fellow at Chatham House, a London-based international affairs think tank.
Earlier this year, Mr Jang and his wife were seen backing the appointment of Pak Pong Ju, a career technocrat, for the post of premier to spearhead a push to improve the economy.
Mr Jang has been the central figure among top officials and family members who worked to ensure tha the young and untested son of Kim Jong Il took over power when his father died in 2011.