In a statement on Thursday the US navy said it had lost confidence in Commander Eric Rasch, who was the executive officer of the squadron that included the 10 sailors at the time of the January incident. He was responsible for the training and readiness of the more than 400 sailors in the unit.
The soldiers were held for about 15 hours before negotiations that involved the secretary of state, John Kerry, led to their release.
A navy official said Rasch failed to provide effective leadership, leading to a lack of oversight, complacency and failure to maintain standards in the unit, the Guardian reported.
Rasch had been relieved of his command duties and reassigned, the navy said.
Several other sailors have received administrative reprimands and others are expected to be sanctioned.
Rasch was promoted to commander of the unit in April — after the Iran incident occurred, but before the preliminary investigation was done.
The sailors, nine men and one woman, were detained after their boat drifted into Iranian waters off Farsi Island, an outpost in the middle of the Persian Gulf that has been used as a base for the Islamic Revolution Guards Corps speedboats since the 1980s.
The sailors were on two small armed vessels, known as riverine command boats, on a 300-mile journey from Kuwait to Bahrain, where the navy’s 5th Fleet is located. The incident, while brief, raised tensions between the US and Iran because of images Iran published of the soldiers kneeling with their hands on their heads. It caused political uproar at home, coming on the day of US President Barack Obama’s final state of the union address and months after the signing of a deal with Iran to curb its nuclear program in exchange for relief from financial penalties.