They have parted company in the same week that she called for a "final solution" following the Manchester attack, which saw 22 people killed and dozens injured after a suicide bomber detonated a device as concert-goers left the Manchester Arena on Monday night.
Hopkins hosted a weekly show every Sunday on the station.
An LBC spokesman said: "LBC and Katie Hopkins have agreed that Katie will leave LBC effective immediately."
Hopkins, a former Apprentice contestant and now a columnist and broadcaster, caused outrage earlier this week with a tweet that appeared to reference the term used by the Nazis for the Holocaust.
The now-deleted tweet, made in the hours after the explosion, read: "22 dead - number rising. Schofield. Don't you even dare. Do not be a part of the problem. We need a final solution #Machester (sic)."
Complaints were made to the Metropolitan Police about Hopkins' tweet.
A spokesman for the Met said on Tuesday: "We can confirm that a complaint has been received by the Metropolitan Police Service on Tuesday, 23 May in relation to a tweet published on the same day.
"As is routine, the allegation will be reviewed and assessed by specialist officers."
The police have been contacted for an update.