Karunanidhi told reporters here that Alagiri had been sacked for criticising the party in the run up to the Lok Sabha election and causing confusion in the minds of DMK members and supporters.
A defiant Alagiri told IANS: "I have no reaction (to my dismissal). I just had lunch, and want to sleep peacefully. I am not the loser. They are the losers."
Asked if he would float a new party, he said: "As of now I have no such plans. Everything will be decided after discussing with my supporters."
On Jan 24, the DMK suspended Alagiri, 63, for opposing his brother M.K. Stalin, 61, who is tipped for the party's top post. Both are 89-year-old Karunanidhi's sons.
Karunanidhi said Alagiri had been asked to explain his conduct after his suspension. But he did not do so.
The former Tamil Nadu chief minister said the decision to dismiss Alagiri was taken in consultation with the DMK general secretary K. Anbazhagan.
The DMK said Alagiri was "continuously criticising party leaders and also defaming the party".
Recently, Alagiri met Prime Minister Manmohan Singh and Bharatiya Janata Party president Rajnath Singh, creating a flutter in political circles.
Alagiri is said to be upset as none of his supporters got ticket to contest the Lok Sabha election.
The DMK had earlier warned party members to keep away from Alagiri or face disciplinary action.
Nothing, however, deterred Alagiri, who went on to meet MDMK leader Vaiko -- a former DMK stalwart -- and BJP's Sivaganga candidate H. Raja.
Both leaders had sought Alagiri's support in the general elections.
Founded in 1949 by C.N. Annadurai, the DMK is one of India's oldest parties. The party came to power in Tamil Nadu in 1967 - 18 years after it was formed. Annadurai was the party's first chief minister.
In 1969, Annadurai died and was succeeded by Karunanidhi with the support of Tamil movie hero M.G. Ramachandran or MGR.
In 1972, MGR was expelled from the DMK, after that he floated the AIADMK. The AIADMK ruled Tamil Nadu for a decade until 1987.