The news emerged a day after Dobbs was named in a defamation lawsuit filed by the voting machine maker Smartmatic.
The $2.7bn (£2bn) lawsuit claims Dobbs was part of a "disinformation campaign" against the company.
Fox, which denies the allegations, said the Dobbs decision was not linked.
The veteran financial journalist, 75, has presented Lou Dobbs Tonight on the Fox Business Network since 2011. He was also an occasional commentator on Fox News, the conservative channel that has been home to several staunch supporters of Mr Trump.
Dobbs - who has recently written the book The Trump Century: How Our President Changed the Course of History Forever - said he had no comment.
Despite the cancellation of his programme, Dobbs remained under contract but was unlikely to appear on the network again, the Los Angeles Times reports.
The Smartmatic lawsuit names Fox Corporation, which is Fox Business Network's parent company, as well as Fox News, Dobbs and two other Fox hosts - Maria Bartiromo and Jeanine Pirro. It also cites Rudy Giuliani and Sidney Powell, two lawyers who represented Mr Trump.
The company accused the group of intentionally repeating the false claim that it was "responsible for stealing" the election by "switching and altering votes to rig" the election for Joe Biden.
Smartmatic claims Dobbs was "one of the primary proponents and speakers for the disinformation campaign".
Fox said on Thursday the network was "proud of our 2020 election coverage and will vigorously defend this meritless lawsuit in court".
Legal experts say the lawsuit has put enormous pressure on Fox.
Dominion, another voting technology maker, has also threatened to sue the network and other conservative media for defamation over their repeated unsubstantiated claims of election fraud.
Following the news of Lou Dobbs Tonight's cancellation, Donald Trump issued a statement, saying: "Lou Dobbs is and was great... He had a large and loyal following that will be watching closely for his next move, and that following includes me."