A senior government official said that as Mr Mishra was no longer a Cabinet minister, he was not entitled to such an accommodation.
Mr Mishra was sacked as the city water minister on May 6 over alleged poor water management.
"After being discharged from his duty as a minister, he could have retained the government's bungalow for 15 days. As per rules, he is no loner entitled to a government bungalow.
In view of this, the department has asked Mr Mishra to vacate the accommodation at the earliest," a senior official told PTI.
Since he was sacked, Mr Mishra has been continuing with his salvo against Aam Aadmi Party's top leadership, including Chief Minister Arvind Kejriwal.
Last month, the Karawal Nagar MLA had accused Mr Kejriwal of accepting Rs 2 crore from Mr Jain and filed a complaint in this regard with the Anti-Corruption Branch (ACB).
After he made the stunning allegation, Mr Mishra was suspended from AAP's primary membership.