The DMA said that Wye Marketing was given every opportunity to fulfil the requirement of its code of practice but had failed to respond despite being contacted on "numerous occasions" by its compliance team.
The agency was referred to the Direct Marketing Commission as a potential breach of the code of practice.
The commission reviewed the case and gave the company two more opportunities to complete the forms and submit them to the DMA's compliance team.
When no response to the final letter was received, it recommended that the company's membership of the DMA be revoked.
The board of the DMA has accepted this recommendation and informed the company of its decision to terminate its membership of the association with immediate effect. Wye Marketing has until January 12 to appeal the decision.
Wye Marketing said that only its managing director Kay Smith could comment on this issue but that she was unavailable until next week.
James Kelly, managing director of the DMA, said: "Our code of practice is the cornerstone in our efforts to build and maintain political, commercial and consumer faith in direct marketing.
"Unfortunately, by not completing the annual compliance form, Wye Marketing failed to demonstrate that their direct marketing activities met the very highest standards as specified by the code.
"We take non-compliance very seriously, yet it is with regret that we have had to revoke the membership of Wye Marketing."
Matti Alderson, chairman of the Direct Marketing Commission, said: "The decision to expel Wye Marketing from the DMA sends out a clear message to DMA members, and to the entire direct marketing industry, that compliance with the DMA Code is a prerequisite of responsible business practice.
"The Commission's role is to ensure that consumers are safeguarded when they use direct marketing, and that the vast majority of companies that follow the rules aren't trading at a disadvantage to those few that don't.
"This balance has been established over many years and is in everybody's interests."