German newspaper Bild am Sonntag said it learned from sources close to the firm that Oliver Schmidt, who was this month sentenced to seven years in jail, was summarily dismissed in a letter sent to his prison in Milan, Michigan.
“His employer is leaving him in the lurch,” the daily wrote, accusing Volkswagen of turning Schmidt into a “global scapegoat” for the emissions cheating scam.
The 48-year-old, who led Volkswagen's US regulatory compliance office from 2012 to March 2015, was arrested while on holiday in Miami in January.
In August, he pleaded guilty to charges he had conspired to commit fraud and violate the US Clean Air Act.
He was also ordered to pay a $400,000 fine.
Seven other current and former VW executives have been charged by US prosecutors, while several investigations into the cheating are ongoing in Germany.
VW admitted in 2015 to equipping about 11 million cars worldwide with defeat devices, including about 600,000 vehicles in the United States.
The scam allowed the cars to dupe emissions tests while emitting up to 40 times the permissible levels of harmful nitrogen oxide during actual driving.
The scandal has so far cost the auto giant over € 25 billion in fines, settlements and remediation.
In arguing for the seven-year sentence, prosecutors said Schmidt had participated in “one of the largest corporate fraud schemes in American history” and led efforts to cover up the company's misconduct in the summer of 2015.
But Bild said Schmidt was far from alone in knowing about the scheme, and accused Volkswagen of trying to pin the blame “on a single engineer”.
“Dozens, if not hundreds of employees were aware of the emissions fraud,” it wrote.