He says there will be a "temporary suspension of all formal relations" between the two parties, saying they can not continue "while you fail to adequately address the anti-Semitism in the Labour Party".
Labor leader Avi Gabbay sent a letter to Corbyn informing him of the decision.
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Mr Gabbay said the suspension was temporary and only applied to relations with Mr Corbyn's office, not with the entire British Labour party.
"It is my responsibility to acknowledge the hostility you have shown to the Jewish community and the anti-Semitic statements and actions you have allowed as leader of the Labour party U.K.", Gabbay wrote in a letter to Corbyn, announcing the suspension, Gabbay's spokesman said.
The Labor Party of Israel and the Labour Party UK have a long history of friendship.
Corbyn is a staunch supporter of the Palestinians and had previously courted controversy by referring to Hamas and Hezbollah as "friends", something he later said that he regretted.
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The leader of Israel's Labor Party suspended ties with U.K. Labour leader Jeremy Corbyn on Tuesday, saying he was concerned about anti-Semitism and hatred toward Israeli policies within the British party.
The latest row over anti-Semitism was sparked when it emerged two weeks ago that Corbyn had posted a Facebook comment in 2012 stating the graffiti artist Kalen Ockerman was "in good company" over his resistance to the demolition of anti-Semitic mural in East London. In the past it has tweeted that "Israel is a steaming pile of sewage which needs to be properly disposed of". A 280-page report produced by David Collier, a UK-based blogger, revealed some of the past group activity which included one member stating that he was reading "Mein Kampf", whilst others used derogatory terms such as "ZioNazi" and "JewNazi" and debated whether Israel was involved in the 9/11 and Paris terror attacks. It has absolutely NO place in the Labour Party or in society. "We all need to do better".
The breach follows widespread accusations that the UK Labour Party under Corbyn, who was elected leader in 2015, has been overly tolerant of anti-Semitism within its ranks.
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