The contract was signed in 2013 and the announcement came just days before the start of the world championships in Beijing. The partnership will end once the current athletics season is over.
Sainsbury's said BA had been notified about the decision in March, adding that it had nothing to do with recent doping allegations in the sport. The company had an option to review the contract at its halfway point.
"Sainsbury's has been a proud supporter of British Athletics since 2013, following our sponsorship of the London 2012 Paralympic Games," the company said in a statement.
"We wish British Athletics all the best with their future events programme."
In May, Sainsbury's reported its first annual loss in a decade, hurt by an industry price war that shows no sign of abating.
(Reporting by Ed Osmond, editing by Keith Weir)
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