When Kim and his family attended an opening ceremony of a golf course in Vietnam last October, they reportedly received funding for a hotel stay and airline tickets.
The strict "Kim Young-ran Act" took effect in South Korea in 2016 as part of the country's efforts to wipe out corruption among civil servants and others who work in the public sector.
Kim is also accused of treating embassy officials in an arrogant and authoritarian manner, a practice called "gapjil" in Korean.
The Ministry of Foreign Affairs sent the case to the Central Disciplinary Committee, suggesting a heavy punishment.
The panel decided to fire Kim in a meeting late last month and recently notified him of the decision, according to the source.
Kim, 53, was appointed to the ambassadorial post in April last year after serving as a Samsung Electronics Co. executive responsible for smartphone sales in Europe. He served at the ministry from 1993 to 2012.