He told Mr Ryall he, the minister, should have the courage of his convictions and sack him and provide the public with reasons for doing so.
The conversation, which took place by telephone after 7pm, was brief, with Mr Ryall hanging up once Mr Thomson said he did not intend to resign.
Mr Ryall's office, when approached for comment last night issued a one-sentence statement: "I expect accountability throughout the public health system."
Mr Thomson said the minister said he had listened to what Mr Thomson had told him a week ago in a briefing on the background to the $16.9 million hospital IT services fraud perpetrated by Michael Swann and Kerry Harford, but that he did not have confidence in him and wanted him to resign.
Mr Thomson said it was clear to him several weeks ago that Mr Ryall wished to remove him and he felt that he was using the briefing last week as justification: "It was a predetermined outcome well before he spoke to me."
Mr Thomson said before Christmas he had offered to go to Wellington to brief the minister about the fraud as he had briefed previous health ministers.
Mr Ryall earlier this month issued a press release saying he had asked Mr Thomson to come to Wellington to discuss the fraud, saying public confidence in the board had been severely shaken by it.
This action, Mr Thomson said, had turned the matter into a "three-ring circus", making it a political matter rather than a fact-finding one.
If the minister had been sincere about his wish to be briefed on the background he would have done so without making such statements.
In a press release issued last night after his discussion with the Otago Daily Times, Mr Thomson said the structure of the frauds was set up well before he became chairman in 2001.
"They occurred under a previous administration and despite the fact that administration was warned regarding Swann's alleged previous dishonesty."
Despite that warning, which was never communicated to the new district health board, the next two budgets during that previous administration resulted in a doubling of information technology expenditure, he said.
"Following the election and appointment of the new board, which I chaired, there was no increase in IT spend during the next three years and no unexplained deviations from budget."
It had only been in the last year of the fraud, during which Michael Swann came under suspicion, that there was any increase.
The warnings given to the previous chairman and chief financial officer were not passed on to him Mr Thomson said, or to subsequent management.
"That is both perplexing and a matter of considerable regret to me"
Mr Thomson said he acted immediately when concerns were raised with him early in 2006.
"I will lie straight in bed as a result of the actions I took."
The most serious aspect of his expected sacking was the message it would send to others.
If someone was unfortunate enough to discover or suspect something illegal going on under their watch, even if it started before they arrived, the minister's message "seems to be to keep it quiet, because you, as well as the criminal, will be held responsible. This is a tragic message to send to staff," Mr Thomson said.
The briefing papers to the meeting a week ago between Mr Ryall and Mr Thomson, which was also attended by board chief executive Brian Rousseau, have not yet been released by the minister's office, despite daily requests from the Otago Daily Times and no apparent objection to their release by the board.
Mr Thomson said he was confident that when the facts fully came out they would demonstrate not only had he acted appropriately over the fraud, but so had the board in its governance role.
That was clear in the briefing to the minister, he said.
Mr Thomson said he would be sad to depart as chairman.
If he were sacked, as expected, Mr Thomson, would still retain a seat on the board as an elected member and last night had not made a decision about whether to continue in that capacity.
