The Nigerian joined the Sky Blues in February on a deal until the end of the season, having been released by Turkish side Kayserispor last summer.
The former Portsmouth and Everton forward made three appearances for City, amounting to a total of 69 minutes and failed to find the back of the net. Coventry have terminated the deal with immediate effect.
A statement from the club says: “The club would like to wish Yakubu all the best for the future.”
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Coventry are bottom of League One, 13 points adrift of safety, with six games left to play.