The right-wing network told The Independent in a statement that it had “agreed to part ways” with Carlson days after it agreed to pay $787.5m to settle a defamation lawsuit with Dominion Voting Systems.
“We thank him for his service as a host and prior to that as a contributor,” the statement said.
Carlson was informed his show was being axed on Monday morning, the New York Times reported.
The decision came directly from Mr Murdoch, the Fox Corporation chairman, sources told the Los Angeles Times.
Fox News had been severely embarrassed by revelations in pre-trial court filings about its coverage in the aftermath of the 2020 presidential elections.
Carlson and fellow hosts Sean Hannity and Laura Ingraham privately mocked regular guests including Donald Trump’s attorneys Rudy Giuliani and Sidney Powell, while continuing to promote their lies and conspiracy theories to their audience.
Carlson called Mr Trump a “demonic force”, and said that hated the former president “passionately” in text messages to an unknown Fox employee two days before the 6 January riots, court documents showed.
“We are very, very close to being able to ignore Trump most nights,” he added. “I truly can’t wait.”
The hosts were spared having to testify at trial when Dominion and Fox News reached a last-gasp $787.5 settlement on Tuesday, after a jury had already been sworn in.