Pankaj Kumar Pandey and Chandresh Yadav have been found working arbitrarily and being involved in financial irregularities in connection with the widening of the national highway.
The state government had acquired land on both sides of the highway in Rudrapur for widening. It is alleged that many agricultural lands were shown as commercial and compensation was given in violation of rules.
The two officers were then District Magistrate of Udhamsingh Nagar.
The suspended officials have been attached to Additional Chief Secretary (Personnel) Radha Raturi for now.
Chief Minister Trivendra Singh Rawat had ordered the probe and disciplinary action has been ordered against them.
The Bharatiya Janata Party government, soon after coming to power, had ordered the probe into the matter and suspended seven sub-divisional magistrates (SDMs) including one who was retired.
A Special Investigation Team was formed later and based on its report action now has been taken against the two IAS officials, Chief Secretary Utpal Kumar Singh said.