The controversial episode took place on September 16 when Nice’s new signing Dolberg discovered that his luxurious timepiece had been stolen from the club’s dressing room.
The 21-year-old immediately went to police to report the incident, but the investigation was quickly dropped after Diaby-Fadiga admitted to the theft.
In a statement released by Nice the club stressed that the player’s contract had been terminated “with immediate effect.”
“Nice and Lamine Diaby-Fadiga parted ways on Tuesday,” Nice said in the statement.
“Following the theft of Kasper Dolberg’s watch from the changing room, and the subsequent admission of the player, the club decided to cancel its contract with the forward with immediate effect.”
“Above and beyond all sporting and financial consideration, OGC Nice cannot and will not accept such behaviour that betrays the confidence that unites all the club’s employees and all the members of the Rouge et Noir family,” the statement reads.
Diaby-Fadiga who is widely recognized as one of the most promising prospects in France, joined the club at the age of 13 and made his senior debut three years later.
The 18-year-old has also represented France internationally at Under-18 level.