In a letter to Mr Williamson, the Prime Minister said a leak inquiry had found "compelling evidence suggesting your responsibility for the unauthorised disclosure".
The probe was triggered after a newspaper published details of a meeting of the NSC that discussed whether to allow Chinese telecoms company Huawei to take part in delivery of the UK 5G data network.
Following a meeting between Mrs May and the Defence Secretary, a Downing Street spokesperson said: “The Prime Minister has this evening asked Gavin Williamson to leave the Government, having lost confidence in his ability to serve in the role of Defence Secretary and as a member of her Cabinet."
Following his sacking, Mr Williamson repeated his denial that neither he nor his team had anything to do with the leak. International Development Secretary Penny Mordaunt has been appointed as the new Defence Secretary, becoming the first woman to hold that post.
In her letter, Mrs May told Mr Williamson that she was "concerned by the manner in which you have engaged with this investigation".
"It has been conducted fairly, with the full co-operation of other NSC attendees," the Prime Minister said. "They have all answered questions, engaged properly, provided as much information as possible to assist with the investigation, and encouraged their staff to do the same. Your conduct has not been of the same standard as others.
"In our meeting this evening, I put to you the latest information from the investigation, which provides compelling evidence suggesting your responsibility for the unauthorised disclosure. No other, credible version of events to explain this leak has been identified."
The SNP's Westminster defence spokesman, Stewart McDonald said the sacking was a "truly disgraceful episode".
"He has let down a great many, none more than those in uniform who protect us," Mr McDonald said. "The government must clarify if they believe that Mr Williamson has broken the law and if the matter will be passed to the police to investigate."
Liberal Democrat leader Sir Vince Cable said Mr Williamson "must now be referred to the Metropolitan Police for a thorough criminal investigation into breaches of the Official Secrets Act".
Rory Stewart, the Prisons Minister, has been appointed to succeed Ms Mordaunt as International Development Secretary, entering the Cabinet for the first time.