Cristian Montano has been sacked for gross misconduct by Oldham following his arrest in the spot-fixing probe.
The 22-year-old winger was one of six players who were arrested and bailed last week after an investigation was launched by the National Crime Agency following a newspaper expose in the Sun on Sunday.
Montano, who began his career at West Ham before moving to Boundary Park in 2012, was named by his team on December 8 as one of the players who had been arrested, with Latics subsequently suspending him without pay.
On Monday morning the Sky Bet League One club issued a statement which revealed they had made the decision to terminate his contract with immediate effect.
Speaking at a press conference, director Barry Owen insisted they had made the right judgment in deciding to axe Montano.
"It's hit a lot of people in the football world and certainly our fans," he said.
"It's been a very, very difficult week and the investigation itself had to be conducted and that's the conclusion we've reached.
"We wouldn't be making the decision if we weren't confident."
Montano has been bailed until April but Oldham are adamant that the decision to sack him will not prejudice the legal proceedings.
A statement on their website, issued through CM Solicitors, said: "After a thorough investigation carried out by Oldham Athletic Football Club relating to the conduct of Cristian Montano and following lengthy discussions with our team of legal advisers at CM Solicitors, a decision has been made by the club board to dismiss the player forthwith.
"Notwithstanding and without prejudice to the ongoing criminal investigation, it is our view that the player's conduct, in not only bringing the name of Oldham Athletic but also the football authorities into disrepute, amounts to very serious breaches of club discipline, and therefore constitutes gross misconduct.
"Oldham Athletic take matters such as this extremely seriously and believe it was essential to act as swiftly as possible in conjunction with our legal advisers to investigate and deal with this matter decisively once they became aware of the allegations and irrespective of any other investigations and proceedings by other agencies."
Montano's sacking follows last week's news that Blackburn striker DJ Campbell, another of those players who were bailed, had been granted time off by the Championship outfit to spend with his family.
His manager Gary Bowyer has backed the relevant authorities to come to the right conclusion on the spot-fixing investigation.
Speaking on Thursday, he said: "It has shocked everybody. Everybody in the game has talked about it, it's something that shouldn't be in the game but the proper people are going to deal with it."