The move reflects growing impatience in Germany at what is perceived as US nonchalance about being caught spying on a close ally.
"The representative of the US intelligence services at the United States embassy has been asked to leave Germany," government spokesman Steffen Seibert said in a statement.
"The request occurred against the backdrop of the ongoing investigation by federal prosecutors as well as the questions that were posed months ago about the activities of US intelligence agencies in Germany," he said. "The government takes the matter very seriously."
Shortly before the decision was announced, Chancellor Angela Merkel told reporters that Germany and the United States had "very different approaches" to the role of intelligence agencies.
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She stressed the need for greater trust between allies, a position she has repeatedly voiced since reports last year that the National Security Agency eavesdropped on her cellphone.
In separate cases over the past 10 days, one man has been arrested and an investigation against another has been launched on suspicion that they worked for foreign intelligence.
Interior Minister Thomas de Maiziere said that the scope of the cases and who was involved are not yet clear, but that talks are taking place with the United States at various levels.
"If the situation remains what we know now, the information reaped by this suspected espionage is laughable," de Maiziere said in a statement. "However, the political damage is already disproportionate and serious.