Brian Souter, the founder of Stagecoach, previously bankrolled a campaign to keep Section 28, the law which banned teachers and pupils from discussing homosexuality in schools.
The businessman has also said gay marriage would take Britain into “a Babylonian-Greek society where sex is primarily a recreational activity”.
During a press conference coinciding with the release of this year’s shortlist, the organisers announced that Stagecoach South East would sponsor the award. The exhibition is shown at Turner Contemporary in Margate, with the organisers saying the choice of sponsor was down to the venue.
Turner Contemporary and Tate have since ended their relationship with Stagecoach in a "mutual agreement".
A statement from them reads: "Turner Contemporary and Tate’s highest priority is to show and celebrate artists and their work.
"The Turner Prize celebrates the creative freedoms of the visual arts community and our wider society. By mutual agreement, we will not proceed with Stagecoach South East’s sponsorship of this year’s prize.
The transport firm also released a statement, reading: "Stagecoach South East has mutually agreed with Turner Contemporary and Tate not to continue with the company's sponsorship of the 2019 Turner Prize.
"We are absolutely committed to diversity in our company; however, we do not want anything to distract from celebrating the Turner Prize artists and their work."
When, at the press conference to unveil the shortlist, it was asked if anyone had considered the choice of sponsorship a bad idea, there was an awkward silence.
Tate Britain director Alex Farquharson said that picking a sponsor "is very much a matter for the hosting venue".
This year’s shortlist includes Lawrence Abu Hamdan, who conducted interviews with former detainees of a notorious Syrian jail.
The other three nominees include London-based filmmaker Helen Cammock, Colombian-born sculptor Oscar Murillo, and self-taught artist Tai Shani, who explores “feminine subjectivity and experience through a gothic/science-fiction lens”.
The four shortlisted artists’ work will be displayed from 28 September 2019 to 12 January 2020 at Turner Contemporary in Margate. The winner of the £40,000 prize will be announced on 3 December at an award ceremony, which will be broadcast live on the BBC.
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