French economy minister Bruno Le Maire called for Renault's board to meet "in the coming days" to pick a "new lasting leadership" to replace Ghosn, who has been charged with under-declaring his income and aggravated breach of trust.
The French state is Renault's biggest shareholder, owning a 15-percent stake.
Ghosn, who built up a formidable alliance between Renault, Nissan and Mitsubishi that sold more cars than Volkswagen in 2017, has already been stripped of his leadership roles at Nissan and Mitsubishi.
But until now the French government had refrained from trying to oust him from the country's second-biggest carmaker.
"I always indicated, while reiterating the presumption of Carlos Ghosn's innocence, that if he was durably prevented [from fulfilling his role] we would move to the next stage. We're there now," Le Maire told France's LCI channel.
The move came a day after a Tokyo court denied bail for the 64-year-old Franco-Brazilian-Lebanese businessman, meaning he could remain in pre-trial detention for several more months. His lawyers have appealed against the refusal of bail.