The opinionated host said she and ABC couldn't agree on a new contract — she wanted one more year, ABC wanted to lock her up for three. So she decided to leave, although she will appear occasionally next season for things like a planned one-hour special on autism.
O'Donnell made more than $3 million for her season on "The View." ABC was willing to spend more to keep her, but wanted a three-year deal so it didn't have to worry about O'Donnell as a potential competitor. She could easily command her own talk show for much more money: She was making some $30 million a year before "The Rosie O'Donnell Show" shut down in 2002.
"It just didn't work," she said on the show Wednesday, "and that's show biz. But it's not sad because I loved it here and I love you guys and I'm not going away."
O'Donnell has helped increase the chat show's audience by about a half-million a day. But her outspokenness has caused continual controversy, including a nasty name-calling feud with Donald Trump that placed "The View" creator Barbara Walters squarely in the middle.
"We have had, to say the least, an interesting year," Walters said. But she said O'Donnell's exit is "not my doing or my choice."
Walters stressed that she wasn't involved in the negotiations with her co-host.
"I would like to make one thing perfectly clear," she said. "I do not participate in the negotiations with Rosie. It's ABC daytime. I'm going to read, 'I did this, I did that,' brings back a lot of other things I was accused of doing and did not do. It was between your representatives."
Photos: Rosie O'Donnell
Variety magazine TV Editor Michael Schneider told Early Show correspondent Jeff Glor he feels O'Donnell turned "The View" into the hottest show on daytime TV and, "Maybe it was tiring, and maybe, after a year, she decided enough was enough."
But Schneider added there's no way O'Donnell is gone for good, saying, "She's managed to pick herself up from every success and failure and move on to the next thing, so clearly, it's not the last we've heard of Rosie O'Donnell."
Walters was frequently left to clean up the damage after O'Donnell. She did it most recently Monday, when O'Donnell was criticized for using bad language and attacking Rupert Murdoch from the dais of the annual New York Women in Communication awards luncheon.
Saying she was "very fond" of Murdoch, Walters pointed out that "Rosie's view is not always mine."
In the Trump imbroglio, O'Donnell was reportedly mad that Walters did not come more swiftly to her defense, while Trump said Walters told him she didn't want O'Donnell on the show — a claim Walters denied.
Trump quickly went on Fox News Channel Wednesday to claim that O'Donnell was fired by ABC because of remarks made at the Women in Communications luncheon.
"Barbara's the happiest person in the world that Rosie's been fired," Trump said.
Cindi Berger, spokeswoman for both O'Donnell and Walters, denied Trump's claim, wondering how he would know what had happened in contract talks between O'Donnell and ABC.