The move to end the pilot project in a public area of the agency's main inquiries centre for migrants in Glasgow came after it was described as offensive and insensitive by politicians and the Scottish Refugee Council.
Last month ministers had to abandon a much-criticised scheme which saw vans carry the same message around parts of London.
Scottish Secretary Alistair Carmichael said that he welcomed the decision that the posters would not be repeated.
He said: "I am pleased we can now put this pilot behind us."
The posters, which read: "Is life here hard? Going home is simple", before adding "Ask about going home," will also be removed from display in the UK Border Agency (UKBA) offices London.
Critics insisted "go home" was a well-known racist taunt that had no place in a government message.
SNP MP Pete Wishart said that the poster campaign had been "xenophobic and reminiscent of racist slogans from the 1970s". He added: "I wrote to Home Secretary Theresa May this summer and cited the impact it would have on our excellent community relations and the anxiety it might cause to some of our minority communities.
"After all, these posters were being used in an immigration centre used by asylum seekers.
"It seems the UKBA have admitted defeat, and I hope we never see something like it again."
In a written ministerial state-ment yesterday immigration minister Mark Harper said that there were no plans to repeat the use of the posters.
James Dornan, SNP MSP for Glasgow Cathcart said: "I'm delighted to hear that the Westminster Government has at last seen sense.
"If this now means that those people who have to attend the Brand Street immigration centre no longer have to put up with such insulting messages then I'm sure most people in Scotland will be delighted."
Last week the Coalition also announced there would be no repeat of the vans which carried almost the same message - warning illegal immigrants to "go home or face arrest".
Mrs May admitted that the vehicles had been "too blunt an instrument".
The Home Office has said that the two schemes were entirely separate and that both had to be evaluated separately.
Coalition sources blamed bureaucracy for the delay in scrapping the poster campaign.
However, it is understood that the decision to remove them has been taken even though their evaluation has yet to be completed.
The Coalition also admitted yesterday that just 11 immigrants volunteered to leave the UK after seeing the "go home" vans.
An official report revealed that the phone number used in the near £10,000 campaign, dubbed Operation Vaken, received a total of 1561 text messages, 1,034 hoaxes.
Labour's shadow home secretary Yvette Cooper said: "The evaluation proves this was never a serious policy to deal with illegal immigration which has been getting worse.
"It was a disgraceful personal error of judgment by Theresa May - she signed off the vans, the slogans and the funding and defended them for months before her recent U-turn."
Mr Harper said the 60 people who left - 11 who saw the vans and 49 who left after hearing about the van campaign - will save the taxpayer £830,000, based on the average £15,000 cost of an enforced removal.