The White House has declined to comment on her departure.
The New York Times, which first reported her firing, cited a White House source who said she is now considered a "separated employee" and would be barred from returning to the executive mansion on Friday.
Described in US media as Mr Trump's gatekeeper, she had an office directly in front of the Oval Office in the West Wing.
Her comments were made in an off-the-record dinner chat with reporters at a hotel in Berkeley Heights, New Jersey, during Mr Trump's holiday at his club in Bedminster, New Jersey, earlier in August.
Sources told CBS News she was drinking and disclosed details about the president's family. She also reportedly gossiped about broadcasters seeking access to the president.
It is unclear how Mr Trump learned of the conversation.
Several White House officials had long suspected Ms Westerhout of disloyalty to Mr Trump, with one former official telling CBS: "She was a spy from day one who sought to use her proximity to the president to curry favour with his detractors."
According to two books about the Trump White House, Ms Westerhout, a former Republican National Committee aide, was upset and seen crying on election night once it became clear that Mr Trump had won.
Despite her apparent dismay at Mr Trump's victory, she managed to land a reported $145,000 (£120,000) position as his gatekeeper.
During Mr Trump's transition, Ms Westerhout was often seen escorting guests through the lobby of Trump Tower in New York
According to the New York Times, she has a private Instagram page where she posts about her life in the White House and travels with the president.
In one post she joked about printing out a piece of paper that Mr Trump had held up at a public event.
When veteran journalist Bob Woodward complained to Mr Trump in an interviewthat his request to speak with him had not been passed along by more prominent aides such as Kellyanne Conway, Mr Trump said he should have contacted Ms Westerhout.
"Madeleine is the key. She's the secret," Mr Trump said.
According to CBS, Mr Trump has also often referred to her as "my beauty".