"The AICC has decided to dissolve the Karnataka Pradesh Congress Committee (KPCC). Its president (Rao) and working president (Khandre) remain unchanged," said All India Congress Committee (AICC) General Secretary K.C. Venugopal in a statement in New Delhi.
Venugopal is also the in-charge of the party's state unit affairs.
The KPCC has 290 office-bearers, including former Central and state ministers, members of Parliament and the state legislature and presidents of its district committees.
"The KPCC has been dissolved for restructuring in the aftermath of the party's poor performance in the recent Lok Sabha elections in which it was routed, winning only one seat," party spokesman Ravi Gowda told in Bengaluru.
As part of the pre-poll alliance with its coalition ally Janata Dal-Secular (JD-S) on seat-sharing and to field joint candidates, the Congress contested from 21 of the 28 parliamentary seats in the state and managed to retain Bangalore Rural.
Though the JD-S contested the remaining 7 seats, it also won only one seat to retain Hassan.
In contrast, the Bharatiya Janata Party (BJP) won 25 of the 27 seats it contested, which is the highest ever for it in the state.
Independent candidate, Sumalatha Ambareesh, backed by the BJP, wrested the Mandya seat from the JD-S. Sumalatha is a multi-lingual south Indian film actress and widow of former Congress state Minister M.H. Ambareesh.
The dissolution of the KPCC comes after Baig was suspended for anti-party activities on Tuesday.
Baig, 67, is an eight-time MLA from the Shivajinagar assembly segment in Bengaluru's city centre.
Upset by Baig's public criticism of the party's state leadership, KPCC served notice to him in May, seeking explanation for his attack on Venugopal, Congress Legislative Party (CLP) leader Siddaramaiah and Rao for the rout in the Lok Sabha elections.
Baig has also been in the news of late for the wrong reasons, including his alleged involvement in a multi-crore Ponzi scheme operated by jewellery trader Mohammed Mansoor Khan, who fled India on June 8.
( With inputs from IANS )