Deen's admitted use of racist language led to Smithfield Foods' announcement.
"Smithfield condemns the use of offensive and discriminatory language and behavior of any kind. Therefore, we are terminating our partnership with Paula Deen," the company said in a statement to CNBC. "Smithfield is determined to be an ethical food industry leader and it is important that our values and those of our spokespeople are properly aligned."
Deen, 66, was fired from the Food Network last week after admitting in a deposition for a lawsuit she used a racial slur regularly at her restaurant in the past. Her remarks sparked a media firestorm and she issued several apologies for her behavior and pleaded for forgiveness.
Her most recent apology has been seen by more than 3.2 million viewers since it was posted Friday on YouTube.
TMZ reported QVC, the network on which Deen sells her cookware, is considering dropping her from its lineup of celebrity product-sellers.
"Please know that QVC does not tolerate discriminatory behavior," a representative for the channel told TMZ, adding the company has "concerns [over] the unfortunate Paula Deen situation."
"We are reviewing our business relationship with Ms. Deen. In the meantime, we have no immediate plans to have her appear on QVC," the representative said.