Embree said he was surprised by the Sunday announcement.
The former Buffaloes star said Athletic Director Mike Bohn told him as recently as last week he would return for a third season.
"I had a funny feeling this morning," Embree said Sunday. "Something told me he'd do this."
Embree's two-year record as Colorado coach was 4-21. He succeeded Dan Hawkins, who had a five-year record of consecutive losing seasons -- meaning Colorado has not had a winning season in seven years.
The 11 losses in 2012 are a school record.
The defense gave up an average of 46 points per game.
Colorado finished last in Pac-12 pass-efficiency defense, rushing defense, total defense, passing efficiency and total offense categories, the Denver Post reported Monday, noting the Buffaloes were outscored in their seven conference games by an average of 50-15.
It was the first Colorado team to go winless at home since 1920.