The comments drew fierce criticism from Trump, who said Bannon "had lost his mind".
Loss of his media perch jeopardizes Bannon's campaign to remake the Republican Party by fielding Trump-allied candidates to challenge incumbent lawmakers. This is a direct reference to Bannon's time in the U.S. Navy where he served as a special assistant to the Chief of Naval Operations working on budget issues after two relatively unremarkable non-combat deployments at sea.
Breitbart News confirmed his departure as chairman on Tuesday.
One of the allegations made by Trump was that Bannon wept after he was told to leave his post as a chief White House adviser.
On Monday, Bannon tried to back-pedal from his comments.
In his new year address last week, Mr Kim said he had a "nuclear button" that could target weapons at anywhere in the USA, and Mr Trump responded that he had a much bigger and more powerful "nuclear button". Bannon is quoted as saying that Trump's son, Donald Trump Jr., and son-in-law, Jared Kushner, engaged in "treasonous" behavior by secretly meeting with Russian representatives during the campaign to get unflattering information about Trump's opponent, Hillary Clinton. "They didn't have any lawyers", Wolff quoted Bannon as saying in the book.
A very short story on Breitbart confirmed the change with a very short statement from Bannon himself.
Stephen Bannon's ouster from Breitbart News has renewed hope among some of the website's former staffers who contend that Bannon betrayed Andrew Breitbart's vision by chasing influence in national politics.
Bannon and Breitbart will work together on a smooth transition, a statement from the company's chief executive, Larry Solov, said.
Mercer is part owner of Breitbart News and has close ties to the Trump administration.
But those projects might require fundraising and Bannon, through his falling-out with Trump, has alienated the billionaire Mercer clan, which would have been his most natural source of financial support.