The oil giant said it will not renew its contract after the current deal ends in 2017 and saying the decision was due to an "extremely challenging business environment".
However, protest groups are already claiming it is a response to a change in tide when it comes to public opinion about oil industry sponsorship.
Yasmin De Silva of art collective Liberate Tate said: "About thirty years ago, the tide turned on tobacco sponsorship, and now the same thing is happening to the oil industry.
"Of course Tate won’t rub it in BP’s face by acknowledging this decision is the result of the increasing public concern about climate change and the huge number of artists, members and gallery-goers speaking out about against the controversial deal."
A Tate spokeswoman described the BP sponsorship as an "outstanding example of patronage" and hailed it as "one of the most significant long-term corporate investments" in the arts world.
BP began its sponsorship of the Tate in 1990 and the head of BP in the UK Peter Mather told The Independent the company was "proud to have played a small part" in the Tate’s growth and successes.
The Tate was forced to reveal the size of the sponsorship deal between the years of 1990 and 2007 in January of last year after it lost a tribunal ruling having initially refused to divulge the details after a Freedom of Information (FOI) request.
The total deal was worth £3.8m and was in annual amounts varying between £150,000 and £330,000, averaging out at £224,000 a year.
Tate argued this was a "considerable sum" for an arts sponsorship but the Platform protest group, which lodged the FOI request labelled it "embarrassingly small".
Despite protests over its sponsorship and accusations it is only used to ‘green wash’ BP’s corporate image, the oil firm still signed a new £10m sponsorship deal over a five-year period with four national institutions.
The deal included a sponsorship of the Tate, the National Portrait Gallery, the British Museum and the Royal Opera House and runs until 2017.
The decision by BP not to renew its deal with the Tate leaves a question mark over its other sponsorships.
BP told The Independent it had "no plans" to end its sponsorships of other arts institutions but added the Tate sponsorship was "the first one up for renewal".
BP’s sponsorship of the Tate has born the brunt of the protests. This included Liberate Tate staging an anti-BP performance in 2011 where a protester was covered in oil outside Tate Britain.
De Silva added: "It’s time for other institutions sponsored by BP, Shell and other oil companies – like National Gallery, National Portrait Gallery, Royal Opera House and British Museum – to follow Tate’s lead and end their deals."
This story originally appeared on PRWeek sister title Marketing