Syco made the decision NOT to renew Sam's contract, revealed The Sun.
And according to the newspaper, Sam is currently looking at her options - including the possibility of taking part in The X Factor's deadliest rival Strictly Come Dancing.
Mum-of-three Sam won the music talent contest in December 2013 and went on to release album The Power Of Love - one of the fastest selling albums of 2014.
But a source now says: "Music is a tough business. Simon realises most X Factor winners have a short shelf life."
Sam herself confirmed the news today (14 February) saying: "Hi guys, yes it's true I have parted ways with syco!! Don't worry tho, I'm happy xx lots of exciting things happening xx."
She previously made no secret of the fact the contract was running out.
In December she admitted: "My contract has finished with Syco, so I don't know what is going to happen. I just don't know.
"There is a cooling-off period and then there are negotiations, so we'll see. I could be unemployed tomorrow."
Hi guys yes it's true I have parted ways with syco!! Don't worry tho, I'm happy xx lots of exciting things happening xx— Sam Bailey Official (@SamBaileyREAL) February 14, 2015
She has previously admitted she'd love to do Strictly Come Dancing telling Reveal: "I'd love to do Strictly. I'd do that show in a heartbeat. I can do the running man! I've got some skills.
"I've never been a trained dancer but I'm quick at picking things up."
However, she said she'd never take part in I'm A Celebrity... because she "doesn't eat testicles"!
The news about Sam's record contract comes just hours after Sam told Twitter fans she had lost her beloved granny.
In a touching message, she said: "R.I.P to my wonderful nan x sadly passed away today aged 84. She was my biggest fan x love you to the moon and back x."
At the end of last year, Sam was forced to call police after being targeted by a Twitter troll.
The singer said that the vile troll had twice reported her to social services. It goes without saying that she has been cleared of any wrongdoing towards her children.
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