Coun Andrea McKenna was due to stand for re-election in the Garforth and Swillington ward in May but has now been stripped of her approved candidate status by regional Labour Party chiefs.
As previously reported by the Yorkshire Evening Post, Coun McKenna was initially asked to step down as a candidate by the Garforth and Swillington branch of the Labour Party.
A local Labour branch does not have the power to deselect candidates so, when Coun McKenna did not agree to the request, the matter was referred further up the party chain to regional level.
It is understood the regional party decided to remove her from the approved panel of candidates after she was interviewed in February.
Coun McKenna subsequently made an unsuccessful appeal against the decision.
She can, however, continue as a councillor until the election.
Coun McKenna yesterday told the YEP: “I would like to wish my Labour colleagues who are standing in May’s election every success and best wishes.
“I would like to thank the residents of Garforth and Swillington for the support for the last 30 years in my role as a Leeds city councillor and parish councillor and a local community activist.
“As far as I’m concerned the matter is now closed and I have no further comment to make.”
Labour’s Garforth and Swillington branch yesterday confirmed that its candidate in May’s election would be local resident Sarah Field.
Branch chair Neil Taggart said: “In Sarah we have a hardworking campaigner we can all get behind.
“Our task now is to speak to as many voters across the ward as possible to win their trust and support for Sarah in May’s election.”
Coun McKenna was fined £120 by magistrates in September after pleading guilty to disabled badge misuse.
She was given a parking ticket when she was caught wrongfully using the badge on Wormald Row, off Albion Street in Leeds city centre, on February 11 last year.
An e-mail was allegedly later sent by a council officer to the local authority’s parking manager which included an unsuccessful request for the ticket to be cancelled.
The council introduced a policy of prosecuting badge cheats as a first option instead of a last resort in late 2012.