Ozil started his Gunners career brightly after making a club-record £42.5m switch from Real Madrid last summer, but has struggled to reach those early heights in recent weeks.
The German international's performance in the 2-0 defeat to Bayern Munich in the Champions League on Wednesday was criticised by some, and Collymore believes that Wenger needs to take Ozil "out of the firing line".
Collymore told The Mirror: "There comes a time when even a top-of-the-range German engine needs to spend some time in the garage.
"For Mesut Ozil, that hour is now. If Arsene Wenger does not take the decision to rest his £42.5million luxury purchase for a prolonged break then there is a very real chance it will be clapped out and written off by the end of the season.
"At which point I fear he may even want to leave. So, Mr Wenger, it is time to make one of your boldest decisions of the season. Take Ozil out of the firing line. Not just for this weekend's 4-1 thrashing of Sunderland. But for at least three or four games."