The controversial memo broke the firm’s code of conduct, Google’s chief executive Sundar Pichai said on Monday in an email to employees.
The memo, shared widely at the weekend, suggested there were fewer women at Google due to biological differences.
Mr Pichai said the text crossed the line due to it "advancing harmful gender stereotypes in our workplace”.
Entitled Google’s Ideological Echo Chamber, the paper argued that "the abilities of men and women differ in part due to biological causes and that these differences may explain why we don't see equal representation of women in tech and leadership”.
The author wrote: "We need to stop assuming that gender gaps imply sexism."
Google has not confirmed who the employee is, but media reports name him as James Damore.
"[I was fired for] perpetuating gender stereotypes," he told Reuters.
He also claimed to have received "many personal messages from fellow Googlers expressing their gratitude" for speaking out.
In his note to staff sent on Monday afternoon, Mr Pichai spoke at length about protecting free speech in Google’s ranks, and that "much of what was in that memo is fair to debate, regardless of whether a vast majority of Googlers disagree with it”.
But he added: "To suggest a group of our colleagues have traits that make them less biologically suited to that work is offensive and not OK.
"It is contrary to our basic values and our Code of Conduct, which expects 'each Googler to do their utmost to create a workplace culture that is free of harassment, intimidation, bias and unlawful discrimination’."
The tech firm's new head of diversity, Danielle Brown, had earlier criticised the memo saying it had "advanced incorrect assumptions about gender".

Pedro Luis Angarita Azpurua, president of the Farmatodo chain, and his vice president were accused of pricing "irregularities".
They were charged under laws aimed at controlling skyrocketing inflation.
The arrests come days after President Nicolas Maduro ordered the arrests of the owners of the well-known Dia a Dia supermarket chain.
Mr Angarita and his deputy Agustin Antonio Alvarez Costa are accused of understocking shelves and of leaving cash registers unstaffed, thus causing long queues to form outside.
Prosecutors said their actions were intended to lead to speculation and rising prices, which would have a "destabilizing" effect on the economy.
News of the arrest came days after President Maduro ordered the arrest of the owners of the Dia a Dia supermarket chain on similar charges.
President of the Venezuelan Federation of Chambers of Commerce Jorge Roig said the offences the executives had been detained for were "completely subjective".
"We consider it as an attack not only on Farmatodo, but on a specific attack on private industry," he said .
In late January, thousands of Venezuelans attended an opposition march in Caracas, banging empty pots to highlight what they say is the shortage of many staple foods.
Demonstrators also voiced discontent at high inflation, crime and long queues.
Many analysts say currency controls that restrict the availability of dollars for imports play a key role in creating a scarcity of many items.
But President Maduro is adamant that many businessmen are colluding with the political opposition to oust his government.
He has accused four supermarket chains of hoarding goods and smuggling items out of the country.
Venezuela - a major oil producer - has been heavily affected by the fall in oil prices on international markets. The economy officially entered recession in December.
A Google employee who wrote a controversial memo about workplace diversity has been fired, the BBC can confirm.
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Venezuela has arrested two top executives of one of the country's largest pharmacy chains.