Sponsor deals are said to have made up 90% of the golfer's billion dollar fortune
The company became the third major sponsor, after consultancy firm Accenture and razormaker Gillette, to limit or end its involvement with the superstar.
Tag Heuer will continue to back Woods' charity foundation, but decided using his current profile in adverts was bad for business following his admissions of infidelity.
"We recognise Tiger Woods as a great sportsman but we have to take account of the sensitivity of some consumers in relation to recent events," chief executive Jean-Christophe Babin said.
Despite taking an indefinite break from the sport, Woods' golfing prowess is still held in the highest regard by his peers.
On Friday - the same day his wife was reportedly meeting divorce lawyers - he was named the PGA Tour player of the year for the tenth time in 13 years.
He received the award, which is voted for by professional players, despite failing to win a major title over the past 12 months.
When his career is over, you'll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now.
Nike chairman Phil Knight
The PGA declined to release the details of the vote, which took place over the past four weeks.
Meanwhile, communications firm AT&T, which backs the US PGA Tour event operated by Woods' foundation, has said it is re-evaluating its relationship with the golfer.
A string of alleged affairs with at least 14 women - including a porn star and a cocktail waitress - have decimated the 14-time major champion's squeaky-clean image.
Yet Nike, the US sportswear giant synonymous with the golfer to whom it pays an estimated $40m a year (just under £25m), remains supportive.
Chairman Phil Knight told Sports Business Journal talk of a career-threatening scandal is overblown.
"When his career is over, you'll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now," Knight said.
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