Mark Domingo violated the Uniform Code of Military Justice and was kicked out of the service before completing his enlistment contract, an official told AP on Tuesday.
The official was not authorised to speak publicly about personnel issues and provided the information on condition of anonymity.
Officials would not provide details about his offence.
Domingo was arrested on Friday as he planned to plant bombs before a scheduled white supremacist rally in Long Beach, authorities say. He was charged with providing material support to terrorists and held without bail.
The 26-year-old, a former combat infantryman, had recently become Muslim and discussed several plots over the past two months to kill scores of people in Southern California in revenge for attacks on mosques in Christchurch on March 15 that left 50 people dead, federal prosecutors said.
The terror plot was foiled by the FBI and police using an undercover officer and informant, who Domingo thought were his accomplices.
Military records show Domingo served about 16 months in the army, including a four-month stint in Afghanistan in fall 2012. He left with a rank of private, the lowest possible grade.
An army photo of Domingo in Afghanistan in November 2012 identified him as private first class, which is two steps above his discharge ranking.
Domingo was given a general discharge, which is an administrative action a step below an honourable discharge, the official said.
