The announcement by First Minister Humza Yousaf came a week after the devolved government abandoned an ambitious climate pledge, sparking tension with its junior partner.
It is the latest setback for the SNP, which has been hit by internal squabbling, resignations, fraud claims and a fall in support before this year's UK general election.
The leader of the opposition Scottish Conservatives, Douglas Ross, called Yousaf "a failed first minister", "weak" and "unfit for office".
He told members of the Scottish Parliament that he would lodge a vote of no-confidence in Yousaf.
Yousaf, who became the first Muslim leader of a government in western Europe when he took over from Nicola Sturgeon in March last year, earlier denied the end of the deal made him a lame duck.
Instead he insisted that it showed "leadership" to recognise it was no longer working.
"After careful consideration I believe that going forward... it's in the best interest of the people of Scotland to pursue a different arrangement," he said.
"I have terminated the Bute House (coalition) Agreement with immediate effect," he said, admitting that ruling as a minority government would be "tough" but promising to work with all parties in parliament.
Green co-leader Lorna Slater called it "an act of political cowardice by the SNP, who are selling out future generations to appease the most reactionary forces in the country".
She said the party would not support Yousaf in a vote of no confidence.
"We no longer have confidence in a progressive government in Scotland doing the right thing for climate and nature," she said.
"So the Scottish Green MSPs will not be supporting Humza Yousaf in a vote of no confidence."
Scottish Labour leader Anas Sarwar, whose party stands to win the most if SNP support dwindles further, said the situation showed that the SNP had "lost their way".
- Net zero -
The SNP-Greens deal, known as the Bute House Agreement after the Scottish first minister's official residence in Edinburgh, was signed in 2021.
It brought the Green Party into government for the first time anywhere in the UK, where devolved administrations in Scotland, Wales and Northern Ireland have limited powers in areas such as environment, health, transport and social policy.
It also gave the SNP a majority at the parliament at Holyrood when the votes of its members of the Scottish Parliament were combined with those of the seven Greens members.
Like the SNP, the Scottish Greens also support breaking away from the rest of the United Kingdom.
As part of the deal, Greens co-leaders Patrick Harvie and Slater were made junior ministers.
The collapse of the deal comes after the Scottish government announced on April 18 that it would scrap its target to reduce carbon emissions by 75 percent by 2030 after the UK's climate change advisory committee described it as "beyond credible".
The UK Climate Change Committee (CCC) last month sharply criticised Scotland for repeatedly failing to achieve its climate targets.
The required acceleration in emissions reductions in Scotland was now "beyond what is credible", due to inadequate efforts in areas including home heating, transport, farming and nature restoration, it said.
Yousaf vowed that Scotland would still meet its target of reaching net zero emissions by 2045.
At a UK-wide level, his SNP currently has 43 members of parliament at Westminster but is expected to lose several in Scotland to a resurgent Labour party, which is tipped to form the next UK government.
The SNP has a seven-point lead over Labour in voting intentions, according to the polling agency Ipsos, but that is down from 12 points a year ago.
Political observers believe the SNP is too fixated on independence and not focused enough on the cost-of-living crisis that has hit Scotland and the UK.
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