"I am afraid we have lost confidence in Hair," Percy Sonn, the ICC president, told reporters in Mumbai.
The decision was taken at the ICC executive board's two-day meeting that ended on Saturday in Mumbai following a complaint by the Pakistan Cricket Board [PCB].
Hair has been in the spotlight since he accused Pakistan of ball tampering during a test against England at The Oval in August. Pakistan captain Inzamam-ul-Haq protested the five-run penalty his squad was handed, and refused to come on the field immediately after the tea break, despite being called by Hair.
Hair awarded the match to England. It was the first forfeit in test cricket.
"I hope we could have a found a way for Darrell, but the ICC executive board didn't wish to appoint him in international matches. I have spoken to him yesterday and he was disappointed," said Malcolm Speed, the ICC chief executive.
Hair's contract with the ICC was not due to expire until March 2008.
"The ICC has a number of lawyers and we are in contact with them, and we will have more discussions with Hair after a few days," Speed said.
"David Richardson [ICC general manager] and myself will speak to Darrell in the next couple of days when he's had a chance to consider what this means to him," Speed said.
The ICC on September 28 cleared the Pakistan team of ball tampering, but banned Inzamam for four one-day matches for bringing the game into disrepute by not continuing the test match.
ICC banned Inzamam-ul-Huqfor
four one-day matches
Hair was initially selected to officiate in the ongoing Champions Trophy in India, but the ICC later removed him from the umpires' panel amid concerns over his safety and security, and of those around him during the tournament.
Hair became an international cricket official in 1992 and has earned a reputation for his strict interpretation of the rules. He has umpired 76 tests and 124 one-day internationals.
In 1995, Hair called Sri Lankan spinner Muttiah Muralitharan repeatedly for a suspect bowling action. Subsequently, he did not officiate a match featuring Sri Lanka for eight years - even though the ICC officially stated that no country could dictate which umpires officiate their matches.
After this year's match forfeiture in England, the PCB demanded that Hair be investigated by the ICC saying that it never wanted him to officiate a game involving it's team again.
The ICC later published e-mails sent by Hair to the world body offering to resign in exchange for $500,000 [¤393,230]. Hair was not happy with the ICC's decision to publish the private correspondence, but refused to criticise his employer.
West Indian umpire Billy Doctrove was the other umpire officiating in The Oval test that ended in the forfeiture, but has escaped most of the criticism.
Usually, decisions pertaining to unfair play require concurrence of both onfield umpires.