The South African prison service has given notice to cancel a contract with international security.
The business is in charge of Mangaung Prison, where convicted rapist and murderer Thabo Bester escaped last May by pretending to die and concealing a corpse in his cell.
The escape was only discovered last month after Bester was assumed to have died in a suspicious fire in his cell.
He and his famous girlfriend were arrested in Tanzania last month.
G4S admitted to security failures at the site but refused to accept blame for Bester's humiliating escape.
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The company's contract to administer the prison was slated to expire in 2026.
However, on lawyers' advice, Minister of Justice Ronald Lamola informed MPs that he was terminating the contract early.
Bester is currently held in another maximum-security prison and is expected to appear before the magistrate court later this month on new charges linked to his escape, including one count of murder.
Bester, dubbed the "Facebook rapist" because he used social networking to seduce his victims, was convicted in 2012 of rape and murdering his then-girlfriend.
He had been jailed and convicted of raping and robbing two other women a year before.
