Gaunt made the remark about Redbridge councillor Michael Stark on November 7 in a discussion about a local authority plan to ban smokers from fostering children.
The decision comes despite an on-air apology by Gaunt after the incident. He added that he had meant to say that Start was a "health Nazi".
Gaunt, who also writes a weekly column for the Sun newspaper, also called the councillor an "ignorant pig" during the live discussion on his weekday morning show.
TalkSport, which received an undisclosed number of complaints over the broadcast, will replace Gaunt with Ian Collins, who has been filling in since Gaunt's suspension two weeks ago pending the investigation.
Adoption and care homes are issues close to Gaunt's heart after he had first hand experience as a teenager, when he spent part of his early teens in care. Gaunt also tacked the subject of Redbridge banning smokers from fostering children in his Sun column on November 7.
Gaunt wrote: "This is the same warped logic that condemns black children to a life in care rather than let them be fostered by white couples. The same master race philosophy that forbids fat couples from adopting.
"The SS -- that is social services by the way -- think the risk from passive smoking is more dangerous to a child than them being left to rot in a children's home.
"Today it's Redbridge but, unless we all make a noise now, tomorrow it will be a national policy and thousands more children will fall victim to the health-and-safety Nazis and be left in a home alone."
Gaunt's agent, Nick Canham, told The Independent after the incident that his client's comments had been misrepresented.
In May, TalkSport sacked veteran presenter James Whale after he breached Ofcom's impartiality rules when he urged listeners to "vote Boris" for London mayor in his regular late night talk show.
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