The president has accused the WHO of failing to hold Beijing to account over the coronavirus pandemic.
"China has total control over the World Health Organization," the president said while announcing measures aimed at punishing Beijing.
Washington will redirect funds to other bodies, he said.
The US is the global health agency's largest single contributor, providing more than $400m (£324m; €360m) in 2019.
Mr Trump, who is campaigning for re-election this year and has been criticised for his own handling of the pandemic, has blamed China for trying to cover up the coronavirus outbreak.
More than 102,000 people in the US have lost their lives to Covid-19 - by far the biggest death toll in the world.
What did Trump say?
"We will be today terminating our relationship with the World Health Organization and directing those funds" to other global public health charities, Mr Trump said in the White House Rose Garden.
"The world is now suffering as a result of the malfeasance of the Chinese government," he said.
He added that China had "instigated a global pandemic that has cost over 100,000 American lives".
The president accused China of pressurising the WHO to "mislead the world" about the virus.
What's the background to this?
Mr Trump's criticism of the WHO's handling of the pandemic began last month when he threatened to permanently withdraw US funding, suggesting the UN health agency had "failed in its basic duty" in its response.
"It is clear the repeated missteps by you and your organisation in responding to the pandemic have been extremely costly for the world," he wrote in a letter to WHO chief Tedros Adhanom Ghebreyesus on 18 May.
He later labelled the WHO a "puppet of China".
China has accused the US of being responsible for the spread of the virus on its own soil, attributing the outbreak to American "politicians who lie".
Earlier this month, Chinese Foreign Ministry spokesman Zhao Lijian said Mr Trump was trying to mislead the public, smear China and "shift the blame for [the US's] own incompetent response".
WHO member states have since agreed to set up an independent inquiry into the global response to the pandemic.