Dylan Martinez/Reuters
"The representative of the U.S. intelligence services at the United States embassy has been asked to leave Germany," government spokesman Steffen Seibert said in a statement.
The White House told Business Insider it was aware of the reports. It didn't comment directly on what it said was an "intelligence matter," but National Security Council spokeswoman Caitlin Hayden said further cooperation between German and U.S. intelligence services was "essential."
"We have seen these reports and have no comment on a purported intelligence matter," Hayden said in an email. "However, our security and intelligence relationship with Germany is a very important one and it keeps Germans and Americans safe. It is essential that cooperation continue in all areas and we will continue to be in touch with the German government in appropriate channels."
There have been two recent rows over suspected German spies feeding information to the U.S.
Last week, Germany uncovered a suspected mole who was feeding information to the CIA about parliamentary inquiries resulting from disclosures made known by former NSA contractor Edward Snowden.
Then, on Wednesday, Berlin revealed a "more serious" investigation involving someone in the military who worked in the Defence Ministry in Berlin.
Details are murky as even President Obama was left in the dark about the first case and may not have known about the second.
Merkel has also expressed disapproval over U.S. spying on her unencrypted cell phone as well as general U.S. spying by the NSA in Germany. The NSA and Germany's BND spy service work closely.
Seibert added that Germany continues to seek "close and trusting" cooperation with its Western partners, "especially the United States."