Private firm G4S will no longer run Brook House immigration removal centre once the contract expires next year, BBC News has learned.
G4S says it has pulled out of the bidding to focus on running prisons.
The company was heavily criticised after undercover filming at the facility near Gatwick Airport captured detainees being mistreated by staff.
The decision means G4S will no longer have any involvement in the immigration and asylum sector.
In August, the company stopped operating accommodation for asylum seekers in the Midlands, north-east England and Northern Ireland.
G4S began running Brook House when it opened in 2009 but was embroiled in controversy in 2017 after the BBC’s Panorama programme broadcast video, secretly taken by a staff member, of detainees being verbally and physically abused.
After the programme was shown, various investigations were carried out and 15 of the 21 staff allegedly involved later resigned or were sacked.
The contract to run the 448-bed facility was due to end in 2018 but was temporarily extended until May 2020.
The Home Office began a tendering process but after initial discussions, G4S has decided not to continue beyond that date.
“G4S will not seek to renew the contract to run Gatwick’s immigration removal centres, Brook House and Tinsley House,” the company said in a statement.
“This will allow us to give greater focus to our custody and rehabilitation business, where we operate four of the highest-rated prisons in England and Wales.”
G4S is keen to acquire further prison contracts as the government seeks to provide 10,000 new places.
There’s also been concern among managers that its bid to renew the Brook House contract might fail because of damaging publicity surrounding it.
Further revelations about alleged abuse are likely to emerge during an independent inquiry which is expected to start next year.
Serco is believed to be a front-runner for the contract. The results of the bidding process are due to be announced in January.
However, the latest inspection report on Brook House suggests there have been significant improvements.
Peter Clarke, chief inspector of prisons, said: “We found no evidence that the abusive culture shown by the Panorama programme was present among the current staff group.”
He went on: “Most detainees were positive about the way they were treated.”And he said the workforce had been “determined” to inject a “respectful” culture into the centre.
Nevertheless, the inspection report, the last under G4S’s watch, said security was sometimes too stringent, detainees spent too long locked in their rooms and rates of self-harm had increased, with 40% saying they had felt suicidal at some point.