The eruption of V4332 Sgr was observed in 1994. During the outburst, the object became extremely red, so it has been considered as to belong to red transients of the V838 Mon type. Optical spectroscopy obtained a few years after the eruption showed a faint M-type stellar spectrum underlying numerous molecular and atomic emission features. It has recently been suggested that the central object in V4332 Sgr is now hidden in a dusty disc and that the photospheric spectrum of this object observed in the optical results from scattering of the radiation of the central star on dust grains in the circumstellar matter. Recent polarimetric photometry has shown that the optical radiation of the object is indeed strongly polarized. If it results from scattering on dust grains, the optical continuum of the object is expected to be polarized. The emission features, on the contrary - as observed directly from circumstellar regions - are expected to be unpolarized. We investigate these predictions. We present and analyse our spectropolarimetric observations of V4332 Sgr obtained with the VLT in the optical region. The optical continuum of V4332 Sgr is linearly polarized with a typical degree of 16.6%. A clear depolarization is observed in the spectral regions where emission features contribute significantly to the observed flux. The only prominent exception is the CaIλ6573 emission line, which is polarized in 21%. The results of our spectropolarimetric observations are in accord with the proposed geometry of the system and the advocated nature of the observed optical spectrum of V4332 Sgr. The continuum is not seen directly but results from scattering on dust within the disc and polar outflow, while most of the gas emission comes from the polar outflow excited by the radiation field of the central source. Additionally, the observed polarization patterns suggest a stratification of the outflow.