The contract to provide internet services to a number of German government departments was due to run out in 2015, but has been ended early. According to reports, the US firm has been replaced by German operator Deutsche Telekom.
Germany’s president, Angela Merkel, complained directly to the US president Barack Obama in June about the alleged tapping of her phone last October.
Earlier this month, Germany launched an investigation into allegations made by Edward Snowden, a former contractor of the US National Security Agency (NSA).
"There are indications that Verizon is legally required to provide certain things to the NSA, and that's one of the reasons the co-operation with Verizon won't continue,” German interior ministry spokesman Tobias Plate told the BBC.
"Furthermore, the ties revealed between foreign intelligence agencies and firms in the wake of the US National Security Agency affair show that the German government needs a very high level of security for its critical networks,” he added.
