The striker has not played for club or country since February 6 and was banned from first-team training in March after a string of disciplinary problems, including oversleeping and being late.
Wolfsburg sporting director Klaus Allofs branded the former Arsenal striker a "menace" to the club and he has now seen his three-year contract terminated less than two years after joining on a free transfer.
A statement read: "Striker Nicklas Bendtner is no longer a VfL Wolfsburg player. The contract with the 28-year-old Dane, which had been valid until June 2017, has been terminated with immediate effect.
"Bendtner had not trained with the team for quite some time and was recently exempted from participation."
Bendtner moved to the Bundesliga following a frustrating spell with Arsenal, despite his well publicised opinions of his own ability and worth to the Premier League giants, leaving after 32 goals in 136 games.
The 28-year-old was 50 minutes late for training earlier in the season and was also fined for posting a photo on Instagram of himself driving a Mercedes, rival car manufacturers to club owners Volkswagen.
Bendtner, who has not scored a competitive goal since October, is now a free agent.
"Both Nicklas and ourselves had high hopes of his engagement at VfL Wolfsburg, but after two years, we have had to ascertain that the expectations were neither fulfilled for him nor for us and a continued cooperation made no sense for either side," Klaus Allofs said.
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