The Monaco-based Venturi Formula E team said on Friday it had parted company with the 44-year-old Canadian driver by 'mutual agreement' following 'disagreement over the future direction of the team'.
Villeneuve, who won his F1 title with Williams in 1997 and is also an Indy 500 winner, made his debut in the electric series in Beijing in October 2015 but retired after a collision.
He fared better in Round 2 in Malaysia, finishing 11th, but was ruled out of December’s race in Uruguay due to a crash in qualifying.
He then had another accident in a subsequent test.
“On paper it looks crap, which I'm aware of and it's frustrating, but we know how competitive we were,” he had said on his personal website after damaging a chassis in Punta del Este.
Villeneuve was the first Formula One champion to compete in the electric series, where the cars are both far quieter and slower and race on urban street circuits. He will be replaced by Britain's Mike Conway.
Formula E, which is now in its second season, has attracted support from car manufacturers Renault, Citroen, Audi and BMW with Jaguar due to join later in 2016.
Original source: DiCaprio electric team unplugs Villeneuve