Ukraine president dismisses governor

Ukraine's president has dismissed one of the country's most controversial tycoons from his regional governor's post.

President Petro Poroshenko - himself a billionaire magnate - accepted Igor Kolomoisky's offer to step down as head of the strategic central Dnipropetrovsk region, the presidency said on Wednesday.

The move follows a dispute over control of the main state oil and gas firm descended into open confrontation.

"The president of Ukraine confirmed Igor Kolomoisky's request to resign" at a meeting between the two men in Kiev, the presidency said in a statement.

Banking billionaire Kolomoisky was appointed to the post after the ouster of Kremlin-backed president Viktor Yanukovych last year and has proved a staunch bulwark against a pro-Russian rebellion rocking neighbouring eastern regions.

He funded a powerful volunteer militia group that has taken a leading role in fighting against the heavily armed insurgents.

Poroshenko insisted that maintaining stability in the key region remained a priority despite the influential oligarch leaving his post.

"We have to maintain peace, stability and calm. Dnipropetrovsk must remain a bastion of Ukraine in the east to defend the peace and calm of its citizens," Poroshenko said.

The end of Kolomoisky's tenure came after armed men suspected to be working on his orders barricaded themselves into the headquarters of the Ukrnafta energy firm, before leaving peacefully on Tuesday after a two-day stand-off.

Kolomoisky's Privat Group owns 43 per cent of Ukrnafta. The show of force followed parliament's passing of a law increasing the state's control over public companies, weakening Kolomoisky's de-facto grip on the oil producer.

Kolomoisky - who is worth an estimated $US2.4 billion ($A3.05 billion) - is believed to have been angered by the sacking of his ally, UkrTransNafta chief executive Oleksandr Lazorko.

The occupation came just days after armed men also suspected of working for Kolomoisky briefly occupied the headquarters of Ukrnafta's pipeline management subsidiary, UkrTransNafta.