Timberwolves President of Basketball Operations Flip Saunders confirmed the move in an issued statement, but didn't reveal the reason for the dismissal.
Citing an anonymous source, USA Today reported the 14th-overall pick in the 2013 NBA Draft and former UCLA star had been disciplined for bringing a female guest into his hotel room Tuesday night.
"We have been made aware of the circumstances surrounding Shabazz Muhammad's dismissal from the NBA's Rookie Transition Program in New Jersey," Saunders said. "The team fully supports the NBA's rules and policies in all matters pertaining to this situation and we will abide by the league's action."
The newspaper said Muhammad faces a fine over the incident and will be made to return to the transition program next summer.
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