In the past 18 months, Yitzhaki's contract has been extended temporarily every three months. The last extension expired on Monday at midnight.
Yitzhaki, who is known for his criticism of several ministries, led by the Finance Ministry, sounded agitated on Monday upon receiving the letter informing him of the decision.
"The CBS administration manager received the notice via email," Yitzhaki told reporters who arrived for a press conference summarizing 2012. "This is not a proper way to end an 11-year terms as the government's chief statistician. I would have expected a different treatment."
Prime Minister Benjamin Netanyahu telephoned Yitzhaki several hours later and asked to apologize. "I find this unacceptable," he told him. "It's inappropriate. A person should hear about the termination of his employment in a different manner. I would like to thank you for the years you served the State."
Labor Chairwoman Shelly Yachimovich said in response, "I fear that the prime minister is taking revenge against a senior government worker who had the courage to tell the truth about his failing economic policy, in a puzzling decision and timing.
"It appears that ahead of the election, anyone who dares present a real picture of reality and refuses to adapt the numbers to Netanyahu's fabrications about the economy is being silenced by Netanyahu in a way reminiscent of dark regimes."
Gad Lior contributed to this report