The Harry Potter actress landed the contract last year and was praised for her "classic beauty" by the company's creative director.
The Sun reports that Watson is being phased out since a new advertising campaign features Rosie Huntington-Whiteley.
Earlier this year, it was confirmed that the Victoria's Secret model would replace Megan Fox in Transformers 3.
"Emma was a huge success. Everyone expected her to be used again," a source said.
> Emma Watson 'confirms new romance'