The EFE news agency said government sources confirmed the dismissal of Paz Esteban after days of rumors on her departure, Deutsche Welle reported.
Earlier this month, Spanish officials confirmed that Prime Minister Pedro Sanchez and Defense Minister Margarita Robles' cellphones were hacked with the Pegasus spyware.
Israeli company NSO says it only sells the Pegasus spyware to government agencies.
In April, Canadian cybersecurity watchdog Citizen Lab said the phones of over 60 people linked to the Catalan pro-independence movement had been hacked using the Pegasus spyware.
Citizen Lab reported that the hacks started in late 2019, with Esteban in charge of the Spanish intelligence agency CNI.
According to Spanish officials, Esteban herself admitted in a closed-door meeting last week that her agency had hacked the phones of several Catalan separatists after receiving judicial permission.