Scottish Greens co-leaders Lorna Slater and Patrick Harvie were seen walking out of Bute House before an emergency cabinet meeting. The Greens said the SNP had "sold out future generations".
It follows the government's decision to scrap key climate targets and a pause on the prescription of puberty blockers for under-18s.
The SNP will now form a minority government.
First Minister Humza Yousaf said he had formally notified Ms Slater and Mr Harvie that the Bute House agreement - which was signed by the two parties following the Holyrood election in 2021 - had been terminated.
The deal saw Mr Harvie and Ms Slater given junior ministerial roles within the Scottish government in return for Green support for the government's policies. Both will now leave their posts.
Mr Yousaf said he had thanked them for their contribution to the Scottish government and made it clear the SNP intended to work with the Greens "where we can" and "in the national interest".
"The Bute House agreement was intended to provide stability to the Scottish government and it has made possible a number of achievements," he said.
"But it has served its purpose - it is no longer guaranteeing a stable arrangement in parliament.
"The events of recent days have made that clear and therefore after careful consideration I believe that going forward it is in the best interest of the people of Scotland to pursue a different arrangement."
Of Scotland's 129 parliamentary seats, the SNP hold 63 while the Greens have seven. The Scottish Conservatives hold 31 and Labour have 22.
The Scottish Greens
announced last week that its members would be given a vote in the coming weeks on whether the party should remain in power with the SNP.
Mr Harvie previously said he would quit as co-leader if the party voted to end the agreement, but on Thursday he said his position was a discussion for another day.
Speaking to journalists in the parliament's Garden Lobby, Mr Harvie said the first minister's decision was a "total U-turn from recent days".
Asked whether the Scottish Greens would be as co-operative with the government over things like the budget, he replied: "Do you think the current government will still be in place for the next budget?"
Meanwhile Ms Slater described the ending of the Bute House agreement as an "act of political cowardice by the SNP" and accused the party of "selling out future generations".
She also said she was confident Green members would have supported the party staying in government if the vote had happened.
She said: "Neither they nor SNP members will have that opportunity. Instead, the most reactionary and backwards-looking forces within the first minister's party have forced him to do the opposite of what he himself had said was in Scotland's best interests.
"By contrast we as co-leaders of the Scottish Greens were prepared to put our own political careers on the line with our members, to defend our achievements in government, despite enduring all that SNP backbenchers and others threw against us."
It comes a week after the SNP's Energy Secretary Mairi McAllan announced that Scotland's target of cutting carbon emissions by 75% by 2030 compared to 1990 levels was out of reach and would be scrapped - sparking anger from many grassroots Green members.
Scotland's NHS also said it was
pausing prescribing puberty blockers to under-18s referred by the country's only specialist clinic following a report by Dr Hilary Cass.
Mr Harvie said there was "distress" in the party over the move and that young trans people may now "not get access to the treatment they need".
