Daly recently breached provisions in his contract requiring that he not consume alcoholic beverages or engage in any gambling activity.
When Daly declined to submit himself, at the company's expense, to further alcohol and gambling rehabilitation, Callaway exercised its right to terminate the endorsement deal.
Daly, 33, was not immediately available for comment. "We care for John as a person, a golfer and a friend, and we are grateful for the period of time he successfully supported the company and its products as a member of our Professional Staff." Ely Callaway, founder and Chairman of Callaway Golf, said. "Regrettably, we cannot continue to have John as a company representative when he is not prepared to take the steps we and our advisors feel are necessary to deal with the alcohol and gambling problems facing him."
The financial terms of Daly's contract, which ran through 2001, were not disclosed. Daly, the long-hitting winner of the 1991 PGA Championship and 1995 Open Championship, joined Callaway in May 1997 following his completion of an alcohol treatment programme at the Betty Ford Centre in Rancho Mirage, California.
Daly, who appeared on to the world golf scene when he won the 1991 PGA at Crooked Stick without a round of practice as the ninth alternate into the field, has earned just $165,565 on the US tour this season to stand 159th on the money list.
He leads the tour in average driving distance at 306.6 yards, but ranks only185th in driving accuracy, finding the fairway only 54.7 percent of the time.
Daly, suffering started well at this year's US Open at Pinehurst with a two-under 68, but faded and made more headlines by telling reporters he had incurred $9m (pounds 5.5m) in gambling losses during the mid-1990s.Reuse content