Gerard Coyne - the man challenging Len McCluskey for the leadership of Unite - has been suspended from his job as a regional official with the union.
The move comes as counting gets under way in the union's leadership ballot.
Mr Coyne, who is seen as the anti-Jeremy Corbyn candidate, has been suspended as West Midlands regional secretary pending an investigation.
He is not thought to have been suspended as a union member.
Mr Coyne's campaign was recently warned by the union's acting general secretary Gail Cartmail that some of their literature contained potentially defamatory statements about Mr McCluskey.
Mr Coyne is understood to be facing disciplinary proceedings for bringing the union into disrepute.
The battle to be the union's general secretary is understood to be on a "knife edge," from early sampling of the ballots by both sides.
Counting is due to be completed late on Friday with the result to be announced next week.
The BBC's assistant political editor Norman Smith said Mr Coyne's supporters see his suspension as an attempt to "nobble" their candidate.
They say his candidacy will not be affected by his suspension, although it could open up the prospect of a challenge if he wins.
Unite is Britain's biggest trade union and the Labour Party's main financial backer.
Len McCluskey has been a staunch supporter of Labour leader Jeremy Corbyn but Labour's deputy leader Tom Watson, and other figures on the "moderate" wing of the party, have thrown their weight behind Mr Coyne.