The company will continue to invest in developing footwear and clothing for the golf market but will “transition out” of making clubs, balls and bags.
Three years ago McIlroy signed a 10-year deal with Nike worth a reported £150m, while 14-time major winner Woods has been their brand leader since 1996.
Nike also sponsors Michelle Wie, one of the LPGA Tour’s high-profile players.
“Athletes like Tiger, Rory and Michelle drive tremendous energy for the game and inspire consumers worldwide,” said Nike Golf president Daric Ashford.
“We’ll continue to ignite excitement with our athletes and deliver the best of Nike for the game.”
Last year sales at Nike’s golf unit fell, for the third successive year, by 8% to £531m which contributed to the decision to pull out of the equipment market.
However, Nike brand president Trevor Edwards said: “We’re committed to being the undisputed leader in golf footwear and apparel.
“We will achieve this by investing in performance innovation for athletes and delivering sustainable profitable growth for Nike Golf.”
McIlroy responded to the news on Twitter.“Sad for @nikegolf employees that worked so hard and made genuinely great golf equipment. Your support will always be appreciated #TeamNike” he wrote.
Woods said he would remain “the iconic ambassador” for Nike Golf, just with a smaller group of products.
“He’s been the most loyal ambassador and longest standing for Nike Golf. That doesn’t change,” agent Mark Steinberg said.
“It just means he’ll likely have some different equipment in the bag, whether that’s tomorrow, next month or a year from now. Tiger and I have been talking about this the last couple of days. We have a very sophisticated, legitimate plan in place and we’re going to see it through.”
Woods began promoting the shoes and apparel when he turned pro, and he made a switch to the Nike golf ball (which Bridgestone manufactured) in 2000 in Germany, winning the US Open by 15 shots a month later.
No other Nike golf ball moment was more vivid than when Woods won the 2005 Masters with a chip-in for birdie on the 16th hole, in which the ball rolled down a slope and hung on the edge of the cup for a full second — the Nike swoosh aimed at TV screens around the world — before falling.
He changed to the Nike irons at the American Express Championship in Ireland in 2002, one week before the Ryder Cup, and then gradually added the fairway metal, the driver and, finally, the putter in 2010.
During those changes, Phil Mickelson caused a stir when he said in a Golf Magazine interview that Woods had “inferior” clubs and then tried to pay Woods a compliment by saying he was the only player good enough to “overcome the equipment he’s stuck with.”