Hamm has been an assistant to Ohio State gymnastics coach Rustam Sharipov. Multiple reports said Hamm was arrested after assaulting a taxi driver in a dispute over a $23 fare.
Hamm won gold at the Athens Olympics in the all-around event, which identifies the world's best gymnast.
The victory was controversial, however, because three judges made a mistake in not assigning the proper scoring value to a parallel bars routine performed by Dae-eun Kim of South Korea. Hamm's gold medal winning total wound up being just .012 of a point higher than that of Kim, but if the proper scoring value had been listed by the judges Kim would have won the gold.
The international governing body of gymnastics refused a South Korean protest on the grounds it had been filed too late, but suspended the three judges involved and later asked Hamm to give up his gold medal. The United States Olympic Committee said Hamm would keep his medal because the International Gymnastics Federation was "trying to shift responsibility for its own mistake."
Hamm, 28, graduated from Ohio State in 2007. Gene Smith, Ohio State's athletic director, said Hamm would be dismissed immediately.
"We have high standards for our coaching staff and unfortunately Mr. Hamm failed to meet those standards," Smith said.