"We no longer see a role for Tiger in our marketing efforts and have ended our relationship," Gatorade spokeswoman Jennifer Schmit said. "We wish him all the best."
The spokeswoman for the sports drink, sold by PepsiCo, said Gatorade would continue its relationship with the Tiger Woods Foundation, the golfer's charitable organisation that focuses on offering educational opportunities to disadvantaged children.
Gatorade discontinued its Tiger Woods-brand drinks in November, a decision that was made before the star's marital infidelity sparked a media frenzy.
The scandal erupted after Woods crashed his car in mysterious circumstances outside his Florida home in the early hours of November 27.
His image went into freefall as 14 women claimed to have had an affair with the married father of two.
Gatorade originally stuck by Woods, while some other sponsors including consulting firm Accenture and US telecoms giant AT&T severed their ties with the American.
Other sponsors, such as Procter and Gamble's Gillette and Swiss watch maker Tag Heuer, have maintained their relationships but are not featuring him in current advertising.
Last week Woods, 34, emerged from self-imposed exile to read a statement in which he admitted to affairs that have damaged his marriage and reputation and put his career in limbo.
"I do plan to return to golf one day, I just don't know when that day will be," the 14-time major champion said. "I don't rule out that it will be this year."
Sporting goods manufacturer Nike, which pays Woods an estimated 40 million dollars a year, has since reiterated its support of Woods, whose prowess on the golf course and power as a global pitchman have helped make him the world's first billionaire athlete.
"Time will ultimately tell what his image ends up being," Nike Brand president Charlie Densen said. "One thing that we do know is that he is still just as good a golfer as he was a year ago.
"In relationship to that, the way we continue to drive our golf business, he's one of our major contributors and we would expect him to be in the future as well."
Electronic Arts Incorporated has also stuck by Woods, pressing on with a new version of their "Tiger Woods PGA Tour" console game and a new online version, "Tiger Woods PGA Tour Online."
"We didn't form a relationship with him so that he could act as an arm's length endorser," EA Sports President Peter Moore said last month.