The woman, who herself was a squadron leader, had allegedly committed suicide in her government accommodation last year in November in Jodhpur apparently after some argument with her husband.
"The flight lieutenant has been dismissed from service," defence ministry PRO in Jodhpur Colonel S D Goswami confirmed over phone.
The officer, Ishant Sharma, was found guilty by the CoI instituted to look into the alleged case of suicide by the lady married to her batchmate, squadron leader V Nair, who is a Su-30MKI pilot in Jodhpur.
Sharma was not available for comment.
In the armed forces, having an affair with a colleague's wife is considered to be a serious punishable offence and is termed as 'stealing of brother officer's wife's affection'.
After the CoI was completed, IAF's South Western Air command had forwarded its recommendations to the defence ministry and it gave its approval for the action recommended by the force, sources said.
The Flight Lieutenant is learnt to be a pilot in the Su-30MKI squadron based in the desert city and had come in contact with the lady officer during informal get-togethers.
Anandita Das, the lady Squadron Leader, hailing from Kolkata, was found hanging from the ceiling fan at about 0300 hours by her fighter-pilot husband on November 28.
According to IAF sources, the couple had some arguments before they retired on the fateful night. Anandita was commissioned into the service in 2006 and got married to Nair in 2008.