Team owner Roger Penske released Allmendinger on Wednesday, three weeks after he tested positive for a banned amphetamine.
Team officials said they were disappointed with the test results that left them with no choice.
"AJ is a terrific driver, a good person and it is very unfortunate that we have to separate at this time," team owner Roger Penske said. "We have invested greatly in AJ and we were confident in his success with our team. The decision to dismiss him is consistent with how we would treat any other Penske Racing team member under similar circumstances. As AJ begins NASCAR's 'Road to Recovery' program, we wish him the best and look forward to seeing him compete again in NASCAR."
Sam Hornish Jr. will drive the No. 22 Dodge at Pocono this weekend and "for the foreseeable future," the team said. Options for the 2013 season will be evaluated.
Allmendinger, who was suspended indefinitely by NASCAR last week for the positive test in late June, apologized and thanked Penske for the support during a "difficult time" the past few weeks.
"I apologize for the distraction, embarrassment and difficulties that my current suspension from NASCAR has provided," he said.
Allmendinger's only way to come back to the series is to complete NASCAR's rehabilitation program and he pledged to do so so he can compete again "in the near future."
Allmendinger was suspended July 7, just hours before the race at Daytona and forcing Penske to bring in Hornish at the last moment. His backup urine sample, tested last week, confirmed the initial positive test.
NASCAR has not said what substance Allmendinger was suspended for, but his business manager has said it was an amphetamine. Allmendinger has said he didn't knowingly take a banned substance and has hired an independent laboratory to help determine what caused the positive test.
Penske has said his employees are subject to random drug testing and he has released employees who have tested positive in the past. He also said he has told Allmendinger that other people with higher profiles have bounced back from similar career-threatening issues.
Allmendinger is the second Sprint Cup Series driver suspended under NASCAR's tightened drug policy implemented in 2009. Jeremy Mayfield was the first and he unsuccessfully sued to have the results overturned. Court documents showed that Mayfield tested positive for methamphetamine.
Allmendinger was hired in late December by Penske to fill the seat that opened when Kurt Busch split with the organization. It was the most prolific ride of Allmendinger's career, and both driver and team seemed thrilled with the pairing even as Allmendinger struggled at times in the No. 22 Dodge. He was 23rd in the Sprint Cup Series standings heading into Daytona, where he won the Rolex 24 Hours of Daytona race in January.
In 2009, Allmendinger pleaded no contest in North Carolina to a misdemeanour charge of driving while impaired. He was given a 60-day suspended sentence, 18 months unsupervised probation and 24 hours of community service. Allmendinger drove for Richard Petty Motorsports at the time, and the team put him on probation through 2010 and fined him $10,000.
He is 25th in the points standings and one top-five finish in his first season with Penske.Suggest a correction