Morris Tshabalala, known as "Captain KGB", was served with a dismissal notice on Friday, EWN reports.
This is the same day he was denied bail in the Pretoria commercial crimes court.
The South African Police Service (SAPS) fired him because he was convicted of an offence and sentenced to a term of imprisonment without a the option of a fine.
Tshabalala was convicted of armed robbery in 1996, but still managed to join crime intelligence in around 2002, where he rose through the ranks to captain.
When he was arrested several years ago, law enforcement officials realised he was a fugitive from justice and he was sent to prison.
Tshabalala continued to get paid throughout his prison sentence, and even reported for duty while on parole – after serving only two years of his 10-year sentence.
There has been no explanation of how he was able to remain employed by the SAPS for so long.