The Japanese car maker informed Granada Enterprises of its decision earlier this week.
Toyota claimed that the two-year association had been successful and had achieved its initial objective of promoting the Toyota brand's entry into F1.
While BARB/TNS figures show a 10% rise in ITV1's F1 viewing figures for the 2003 season, the sport reached a nadir the previous year when viewers switched off in droves during one of the least exciting World Championship campaigns in the sport's history. The slump in 2002 led to Toyota receiving a cash rebate from ITV.
Rule changes introduced in 2003 are widely acknowledged to have improved the spectacle, with Michael Schumacher only managing to snatch the World Championship in the final Grand Prix in Japan earlier this month.
Toyota took on the sponsorship in 2002 from previous backer Texaco.
The car maker's UK marketing director, Matt Harrison, said Toyota considered using the sponsorship to promote different models from its range, but the money would instead be spent supporting existing brand campaigns for the Avensis, Corolla and Yaris cars.