Create a console application and add the reference if Microsoft.SharePoint .
Add the web reference of version’s (http://MossSite/_vti_bin/versions.asmx) web service.
 
   1: //Change the SPSite URL.
   2:            using (SPSite site = new SPSite(http://MossSite/sites/SiteCollection))
   3:            {
   4:                using (SPWeb web = site.OpenWeb())
   5:                {
   6:                    //Change the Document Library Name.
   7:                    SPDocumentLibrary library = (SPDocumentLibrary)web.Lists["MATTDOCLibrary"];
   8:                    foreach (SPListItem item in library.Items)
   9:                    {
  10:                        Console.WriteLine(item.Name);
  11:                        Console.WriteLine("====== BEFORE DELETION =====\n\n");
  12:                        SPFile file = (SPFile)item.File;
  13:                        int counter = item.Versions.Count;
  14:                        Console.WriteLine("counter :- " + counter);
  15:                        VersionService.Versions objVersion = new VersionService.Versions();
  16:                        objVersion.Credentials = System.Net.CredentialCache.DefaultCredentials;
  17:                        System.Xml.XmlNode ndVersion = objVersion.DeleteAllVersions(item.File.ToString());
  18:                    }
  19:                    library.Update();
  20:                    web.Update();
  21:                    foreach (SPListItem item in library.Items)
  22:                    {
  23:                        Console.WriteLine("\n" + item.DisplayName);
  24:                        Console.WriteLine("======AFTER DELETION =====\n\n");
  25:                        foreach (SPListItemVersion subitem in item.Versions)
  26:                        {
  27:                            Console.WriteLine("Version ID : " + subitem.VersionLabel.ToString());
  28:                        }
  29:                    }
  30:                }
  31:            }