Walbeck, 40, has been chosen as his league's manager of the year four times in six seasons. Altoona had an 82-60 record this season.
The Pirates offered no explanation for the move, but they have disciplined or fired other Minor League employees in the past for not following the organization's strictly enforced format for developing and instructing players.
"It caught me off guard," Walbeck told the Pittsburgh Tribune-Review. "I've always done the best I can, knowing that one day I'll get back to the big leagues. I hadn't decided yet what I wanted to do [next year]. The Pirates probably sensed that I wanted to advance and probably felt this is best for my development and growth."
Walbeck, the Texas Rangers' third base coach in 2008, was told there was no other job for him in the Pirates' organization. He has talked of wanting to manage above the Double-A level.