As widely expected, Sauber and Honda have called of the deal for the Japanese manufacturer to supply its power unit to the Swiss outfit in 2018.
The departure last month of Sauber team principal Monisha Kaltenborn put the Hinwill-based team's management temporarily in flux.
Sauber and Honda subsequently held talks which resulted in the two parties deciding that differences in the future directions” of the two parties meant it was best to cancel the deal.
"We had built a good relationship with Sauber, and had been looking forward to entering the 2018 F1 season together," said Yamamoto.
"However, during discussions after management changes at the team, we reached a mutual agreement to call off the project due to differences in the future directions of both parties.
"We would like to thank Sauber for their cooperation, and wish them all the best for their future."
Sauber team boss Fred Vasseur said: "It is very unfortunate that we have to discontinue the planned collaboration with Honda at this stage.
"However, this decision has been made for strategic reasons, and with the best intent or the future of the Sauber F1 Team in mind.
"We would like to thank Honda for their collaboration and wish them all the best for their future in Formula 1."
The identity of Sauber's future engine partner remains uncertain at this stage, although one would believe that the Swiss outfit likely hedged its bets before severing ties with Honda. The team could possibly extend its supply deal with Ferrari, or choose to work with either Mercedes or Renault.
The split between Sauber and Honda will not change the Japanese manufacturer's current commitment to Formula 1, and to its current partner McLaren.
“Honda’s passion for motorsports and strong commitment to Formula 1 remains unchanged," the company said in a statement.