"I announce with a tear in the heart: Venezuela breaks off from this moment all relations with the government of Colombia," Venezuelan President Hugo Chavez told reporters in his presidential palace in Caracas.
The announcement marked a fresh spike in tensions between the South American neighbours, which went to the brink of war in 2008 over a Colombian military raid into Ecuador to destroy a cross-border rebel camp.
Colombia, Washington's staunchest military ally in the region, and Venezuela, a Cuban ally that has accumulated an arsenal of modern Russian warplanes and weapons, have frequently quarrelled over the past few years.
The putative help Chavez is accused of giving Revolutionary Armed Forces of Colombia (FARC) guerrillas has fuelled much of the ill-will.
Diplomatic relations have been fragile after past downgrades.
Colombia and Venezuela froze diplomatic ties last year after Bogota and Washington inked a military cooperation agreement Chavez considered a threat to regional security.
A mutual loathing between Chavez and Colombian President Alvaro Uribe -- who steps down August 7 to be succeeded by his former defence minister Juan Manuel Santos -- has also aggravated the situation.
Chavez's decision to break ties came in response to Uribe's charge that rebels from the FARC and the smaller National Liberation Army (ELN) insurgency group were using Venezuela as a rear base with impunity.
Uribe, in a statement last week, spoke of "the presence in Venezuela of terrorists who are seeking to attack our country."
Four FARC leaders and one from the ELN were in Venezuela, operating from there with impunity, he said, threatening to take the matter to international forums.
Today, the Colombian representative to the Organisation of American States, Luis Hoyos, told the Washington-based body that Bogota had evidence of "the consolidated, active and growing presence of these terrorist bands in the brother country of Venezuela."
Showing graphic photos of victims of attacks he said were carried out by Venezuelan-based guerrillas, he said Caracas must "accept its obligation" to bar the rebels from its territory.