In a media statement, authorised by Aloma Johansson, Deputy Pro-Chancellor of the USP Council, the Executive Committee also resolved that the VC be suspended from duties on pay, and without withdrawal of privileges.
As earlier reported, Professor Derrick Armstrong has been appointed as Acting Vice-Chancellor and President, to manage the affairs of the University.
The statement does not reveal who will undertake the investigation into allegations against Professor Pal.
Meanwhile a fresh protest at the University of the South Pacific's Laucala Bay Campus in Suva was quickly stopped by Police today when protesters were told they had to apply for a permit.
The protesters - angry at what they say was the illegal suspension of Vice Chancellor, Professor Pal Ahluwalia - were members of the University of the South Pacific Staff Union (USPSU).
"The main reason why we wanted to come out and protest was because yesterday, we were protesting for Pal to stay but we have now received confirmation that he has been asked to step down so we needed to protest and also to be heard," USPSU General Secretary Lima Finiasi told IB Online.
"The appeal we want to make today is to all the leaders of the region who owns the university. We believe that the Vice Chancellor was elected by the full council and it will need the full council decision to remove him. And we believe that the meeting yesterday is questionable in legality in terms of how it was called and how it was conducted and the powers it has to remove the Vice Chancellor," Finiasi said.
He said the protesters respected the law and withdrew their protests because the police were polite, but it did not deter their quest to press on with their resistance to what they believe is a sinister attempt by certain interests within Fiji's ruling elite to remove Ahluwalia.
Ahluwalia, who was appointed to the position last year, had compiled a damning report exposing alleged financial mismanagement at the university.
Yesterday, hundreds of staff and students held two separate protests at the Laucala Bay Campus as word got out that a meeting by a subcomittee of the university's ruling council was being convened by the USP Council chair Winston Thompson, and that the purpose of the meeting was to discuss allegations of misconduct against Ahluwalia.
Related protests were also taking place at the university's Alafua campus in Samoa.
"We have been writing for the past few weeks, appealing to members of the various councils, appealing to the various heads of states...and there have been responses from the various ministries of education in member countries including the incoming Chancellor, President of Nauru. But all these things couldn't avoid the meeting that took place yesterday," said Finiasi.
Established in 1968, USP is jointly owned by the governments of 12 member countries: Cook Islands, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Solomon Islands, Tokelau, Tonga, Tuvalu, Vanuatu and Samoa.
Fiji is USP's biggest member contributor. The University has campuses in all member countries with its Laucala Bay campus being its main campus.
Photo file USP Caption: Vice Chancellor Professor Pal Ahluwalia