BP is to offload its 19.75% stake in Russian state-owned oil firm Rosneft with immediate effect.
The firm's chief executive Bernard Looney is also resigning from Rosneft's board along with its other Rosneft director, Bob Dudley, the oil firm said in a statement.
The statement said Russia's invasion of Ukraine "caused us to fundamentally rethink BP's position with Rosneft".
It has held the shareholding in the Russian company since 2013.
Mr Looney had been on the Rosneft board since 2020, alongside its chairman Igor Sechin, who is a close friend and ally of Russian President Vladimir Putin.
The PA News agency reported Mr Looney was in Russia as recently as October, when he appeared on a panel with Mr Putin, which he later described as a "privilege".
BP chairman Helge Lund said that, while BP had operated in Russia for more than 30 years and had "brilliant Russian colleagues", Russia's attack on Ukraine was "having tragic consequences across the region" and represented a fundamental change.
"It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue."
Company officials say it is too soon to say exactly how this stake will be disposed of.
It could potentially be seized, or sold.
Mr Looney said that he had been "deeply shocked and saddened" by the situation in Ukraine and it had caused BP to fundamentally rethink its position with Rosneft.
"I am convinced that the decisions we have taken as a board are not only the right thing to do, but are also in the long-term interests of BP," he said.
Business secretary Kwasi Kwarteng said: "I welcome BP's decision to exit its shareholding in Rosneft oil company.
"Russia's unprovoked invasion of Ukraine must be a wake-up call for British businesses with commercial interests in Putin's Russia."
BP's latest annual results, published two weeks ago, revealed Rosneft accounted for £2billion of its profits, about a fifth of its total.
Oil prices surged past £74 a barrel to hit their highest level for more than eight years after Russia launched its invasion of Ukraine on Thursday.
