The feds are investigating a no-bid contract awarded to Byrd-Bennett's former employer.
Two school days were added on to the school year after the February cancellations, CPS said.
More than 800 families had selective-enrollment applications rejected as incomplete.
Community groups are proposing an open-enrollment green technology school in Dyett.
Now that the Pilsen school's council has voted to fire her, CPS will approve or deny the recommendation.
The City Council Health Committee took up the issue of sleep deprivation among teenagers.
The current school will shut down at the end of this year, before the new school opens in 2016-17.
Ald. Margaret Laurino submitted a resolution calling for hearings on the issue.
Dyett High School was scheduled to close at the end of the upcoming school year.
"His continued leadership of the school would be a distraction," CEO Barbara Byrd-Bennett said Friday.
Education groups said the alderman never bothered holding meetings before claiming neighborhood support.
Ald. Pat Dowell promised to appeal to CPS officials on behalf of Mollison.
Fifth-grade enrollment at KIPP College Prep Middle School ends July 25.
CPS says the layoffs are due to "enrollment declines," claims fewest end-of-year teacher cuts in years.
Ald. Matt O'Shea believed improvements at MPHS would change the perception of the neighborhood school.
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