ESPN reported last week that Fountas' contract was set to be ended with the MLS club after the allegations, which stem from an incident that occurred July 15 during the second half of a match between DCU and the New England Revolution.
"D.C. United and forward Taxi Fountas have mutually agreed to terminate his contract, effective immediately," D.C. United said in a statement Thursday.
"Fountas was placed on administrative leave by MLS on July 21 following what the league determined were credible allegations that he used prohibited and discriminatory language against another player.
"There is no place for racism, homophobia, misogyny, or discrimination of any kind in our sport and world and D.C. United do not tolerate any acts of this nature."
Around the 67th minute of the game against New England, Fountas, who is white, and Robertha, who is Black, can be seen arguing. The disagreement carried into the locker room after the match, with Robertha allegedly striking Fountas with a foam roller, a device commonly used for treating muscle injuries, The Athletic reported.
Later, Robertha is reported to have told team officials that Fountas used the N-word, which the club immediately communicated to league officials, resulting in an investigation.
Fountas and Robertha were initially placed on administrative leave, although Robertha was reinstated July 24.
"It was announced earlier today that D.C. United and forward Taxi Fountas have mutually agreed to terminate his contract, effective immediately," MLS said in a statement.
"Fountas was placed on administrative leave on July 21 following credible allegations that he used prohibited and discriminatory language against another player.
"Major League Soccer and its clubs are committed to eradicating racism from the game."
This is the second time since Fountas joined D.C. United in January 2022 that accusations of racist behavior have been leveled at him.
A subsequent investigation conducted by MLS found Mabika's allegation "credible," but, because it couldn't be corroborated, no fine was issued to Fountas.
Black Players for Change, an organization consisting of more than 170 Black players, coaches and staff in MLS, said "more work clearly needs to be done" to eradicate racism from MLS and beyond.
"Black Players for Change continues to strive to maintain an environment that is free from racial prejudice for all players, coaches, staff, and fans," the organization said Thursday in a statement.
"Ensuring accountability for those who engage in racism sends a clear message that such abhorrent behavior will no longer be tolerated in Major League Soccer. We stand in solidarity in holding individuals accountable for their actions, regardless of their position or contributions to the game."
Information from ESPN's Jeff Carlisle was used in this report.