Red Bull have cancelled the contract of junior driver Juri Vips after he used a racial slur during a livestream, the team announced on Tuesday.
Vips, who apologised for his behaviour, was initially suspended on June 22 while the team carried out an investigation, which has now been concluded.
"Following its investigation into an online incident involving Juri Vips, Oracle Red Bull Racing has terminated Juri's contract as its test and reserve driver. The team does not condone any form of racism," Red Bull said in a statement.
Vips has been racing in Formula Two with British-based Hitech Grand Prix and last month drove Red Bull's Formula One car during first Friday practice at the Spanish Grand Prix.
"I wish to unreservedly apologize for the offensive language used during a live gaming stream earlier today," Vips wrote on Instagram last week.
"This language is entirely unacceptable and does not portray the values and principles that I hold. I deeply regret my actions and this is not the example I wish to set."
Information from Reuters contributed to this report.