During mitosis and meiosis, sister chromatid cohesion resists the pulling forces of microtubules, enabling the generation of tension at kinetochores upon chromosome biorientation. How tension is read to signal the bioriented state remains unclear. Shugoshins form a pericentromeric platform that integrates multiple functions to ensure proper chromosome biorientation. Here we show that budding yeast shugoshin Sgo1 dissociates from the pericentromere reversibly in response to tension. The antagonistic activities of the kinetochore-associated Bub1 kinase and the Sgo1-bound phosphatase protein phosphatase 2A (PP2A)-Rts1 underlie a tension-dependent circuitry that enables Sgo1 removal upon sister kinetochore biorientation. Sgo1 dissociation from the pericentromere triggers dissociation of condensin and Aurora B from the centromere, thereby stabilizing the bioriented state. Conversely, forcing sister kinetochores to be under tension during meiosis I leads to premature Sgo1 removal and precocious loss of pericentromeric cohesion. Overall, we show that the pivotal role of shugoshin is to build a platform at the pericentromere that attracts activities that respond to the absence of tension between sister kinetochores. Disassembly of this platform in response to intersister kinetochore tension signals the bioriented state. Therefore, tension sensing by shugoshin is a central mechanism by which the bioriented state is read.