On Monday, Union Cycliste Internationale accepted an August report from the U.S. Anti-Doping Agency that accused Armstrong of leading a massive doping program on his teams.
The wave of sponsors dropping Armstrong crested last week, around the same time Armstrong stepped down as chairman of his Livestrong cancer charity.
Oakley said it was waiting to hear UCI's decision. Now, the sunglass and sports clothing maker says it is severing ties effective immediately.
Other sponsors that have dropped Armstrong include Nike, Trek Bicycles and Anheuser-Busch, 24 Hour Fitness and Honey Stinger.
Oakley is owned by Italian company Luxottica Group SpA.