At a crisis meeting in Birmingham today party members voted by 867 to 500 to express their lack of faith in his ability to lead the party.
Mr Bolton, who lives in Folkestone, faced criticism over the relationship which attracted even more attention when it emerged she had posted racist comments and said the Royal Family would be tainted by Prince Harry's marriage to Meghan Markle.
Party veteran Gerard Batten, a founder of Ukip, was announced as the interim leader, while a new leadership election will be held within 90 days.
The bookmaker William Hill immediately made former leader Nigel Farage their 7/2 favourite to head up the party yet again.
Bolton, a former army officer, is the third elected leader since Farage stepped down and has vowed major reform of the party.
Outgoing party chairman Paul Oakden told delegates to remain faithful to the party regardless of the decision.
The former soldier was hoping he could win the support of Ukip members at the meeting in Birmingham, but alienated much of the crowd with a threat to sue the party if he lost during his final speech on Saturday afternoon.
The pro-Brexit party has lurched from crisis to crisis since Mr Farage relinquished power following the 2016 referendum, with a succession of leading party figures failing to keep a grip on the leadership.
Bolton has ended the relationship but a string of senior UKIP politicians resigned over his leadership, warning the situation had become "almost farcical".
Mr Bolton earlier said he thought "it's going to be very hard for the party to survive" another round of leadership turmoil. It's time for UKIP to focus on politics and Brexit and not private lives. Bunch of muppets. My love for Henry is unconditional of political leaderships.
"It's not about whether I go, specifically, it's about whether or not the party goes through another leadership contest and an interim leadership beforehand". "I ain't going anywhere". He also advised Mr Bolton to "get on with the rest of your life" - but Mr Bolton raised the possibility that he might stand again for the leadership, or even sue the party, saying: 'You can not keep a good man down - I am not finished with politics'.
"The people who started complaining about this were people on the NEC, none of whom voted for me in the leadership election", he said.
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