This was announced by two government sources on Tuesday, in the latest sign of a power struggle among the ruling elite.
The move came days after Mugabe publicly rebuked the woman who was seen just months ago as his most likely successor, denouncing her before party loyalists as leader of a "treacherous cabal" bent on removing him from office.
The sources, who declined to be named because they are not authorised to speak to the media, said Mujuru and several ministers aligned to her received dismissal letters on Monday night.
(READ MORE: Zimbabwe's Mugabe purges "treacherous" deputy once seen as)
"A new cabinet list will be released later today," one of the sources told Reuters.
The news appeared to seal the political fate of the vice president, seen by some in the Zimbabwean business community as a common-sense leader who could have helped restore ties with the West that fell apart during the latter half of Mugabe's 34 years in power.
Mujuru, who was also dismissed as Mugabe's deputy in the party last week, gave statements to the Tuesday editions of two private daily newspapers dismissing the accusations against her.
"The allegations that I, alone, or together with various distinguished comrades have sought to remove His Excellency R G Mugabe from office are ridiculous," Mujuru said.
Mujuru, the 59-year-old former guerrilla leader known as "Spill Blood" during the liberation war, was not immediately available to comment on the report of her dismissal.
Mugabe, 90, and in power since independence from Britain in 1980, has not indicated a preferred political heir, but his advanced age and rumours of ill health have escalated succession fights in the ruling ZANU-PF party.
(READ MORE: “Gucci Grace, PhD” stirs up race to lead post-Mugabe Zimbabwe )
The race has been shaken up in recent weeks by first lady Grace Mugabe, 49, who has emerged as a potential successor. She has also launched withering attacks on Mujuru.
Mujuru's fall could also clear the path for Justice Minister Emmerson Mnangagwa, a hardline Mugabe loyalist known as 'The Crocodile', to position himself to take over when Africa's oldest head of state dies or retires.
The current political infighting comes against a backdrop of slowing economic growth and high unemployment.