Finke is leaving after repeated clashes with Jay Penske, who purchased the site in 2009 and also owns Variety.
"I'm so happy," Finke said in a brief interview.
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Finke said she plans to start a new website that will compete with Deadline and Variety in chronicling the ins and outs of Hollywood.
Known for her biting commentary and snarky observations about the industry and the executives who lead it, Finke has been aiming most of her vitriol lately at Penske in an attempt to get out of her contract.
However, things took a turn this week after the two met with a mediator in an effort to reach an accord. While Finke said the talks didn't appear to go far, nonetheless Penske decided to release her from her contract, which ran through 2016.
Finke acknowledged that by exiting Deadline Hollywood before her contract expired, she was leaving "money on the table."
The relationship between Penske and Finke unraveled soon after he purchased renowned trade outlet Variety last fall. Finke had wanted a prominent role running Variety, and claimed that Penske had said that would happen.
However, no such role was forthcoming and Penske instead installed a trio of editors to manage Variety. Finke then began to complain that Variety was given preferential treatment and more resources than Deadline Hollywood. She often mocked Variety in posts on Deadline.
In a note to readers Tuesday night on the Deadline Hollywood website, senior editors Mike Fleming and Nellie Andreeva announced her departure.
"Nikki Finke will no longer be leading Deadline Hollywood, and she will not be writing weekend box office or filing stories going forward," the pair wrote. "This is an emotional and painful parting of the ways for us.
"Businesses evolve and change, and we've learned that no one is indispensable."
Penske did not immediately return a call seeking comment.