He said he was leaving UKIP because he is uncomfortable with the direction it has taken in recent months.
Mr Farage has called for the party’s current leader, Gerard Batten, to be ousted after he appointed political activist Tommy Robinson as an adviser.
Writing in The Daily Telegraph, Mr Farage said: “And so, with a heavy heart, and after all my years of devotion to the party, I am leaving UKIP today.
“There is a huge space for a Brexit party in British politics, but it won’t be filled by UKIP.”
Mr Farage insisted the UKIP had been successful in the past because it had a policy of “excluding extremists”.
The 54-year-old led the eurosceptic, right-wing party from 2006 to 2009 and again from 2010 to 2016.
He helped lead the campaign to leave the EU when then prime minister David Cameron called for a referendum on EU membership.
Since stepping down as leader following the vote for Brexit, he has been critical of UKIP – describing it as disorganised and poorly led.
Mr Farage was once ridiculed by Mr Cameron as the leader of a bunch of “fruitcakes and loonies and closet racists”.
He has repeatedly taunted EU leaders over what he calls the “Brexit revolution” and is a keen supporter of US President Donald Trump.
Last month, Mr Farage said he would write to UKIP’s ruling National Executive Committee (NEC) to demand a vote of no confidence to remove Mr Batten as leader. He also accused him of damaging both the party and the Brexit cause.
Mr Batten has come under fire within the party in recent weeks for taking far-right activist Robinson on as an adviser.
UKIP subsequently said the NEC had voted “overwhelmingly” against a motion of no confidence.
However a statement from the party said it “does not endorse the appointment of Tommy Robinson in any advisory role”.
It added: “He is not a UKIP member and through his associations he is barred from joining UKIP.”
Mr Farage confirmed he was quitting the party on his LBC radio show.
He said: “I have worked tirelessly for UKIP.
“I made sure we talked about tough issues, but we absolutely excluded anybody who’d ever been a member of the BNP, the EDL.
“We wanted to make sure that when the abuse was thrown at us it couldn’t be possibly proved true.”
Mr Farage added that “a lot has changed” under the leadership of Mr Batten.
“He seems to be pretty obsessed with the issue of Islam, not just Islamic extremism, but Islam – and UKIP wasn’t founded to be a party based on fighting a religious crusade.
“And also obsessed with this figure called Tommy Robinson.”
He continued: “So with very great reluctance I have now resigned my membership of UKIP.
“I’ve cancelled my standing order and the bank, I’m no longer a member of UKIP.”
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