The US payments company had previously blocked Gab, a far Right social network, and US conspiracy theorist Alex Jones for breaching its terms of service.
Mr Robinson had become the subject of online petitions to force the payments company to drop him from its service. He has previously been banned from Twitter, but his Facebook page remains online with almost 1 million likes.
PayPal said it could not comment on individual customers, but said: "We do not allow PayPal services to be used to promote hate, violence, or other forms of intolerance that is discriminatory.
We do not take decisions like these lightly, and we work hard to be rigorous and fair-minded when reviewing PayPal accounts.
The payments service is understood to have told Mr Robinson that he had violated its terms of service and that Paypal could not be used to promote hate or discrimination. The BBC first reported the news.
Mr Robinson was convicted of contempt of court over the summer, but this ruling was later quashed. The case has since been referred to the Attorney General.
The conviction sparked protests to "free Tommy Robinson". Critics started a rival petition to force Mr Robinson off Paypal, with one online petition gaining 67,000 signatures.
PayPal said its platform could not be used to promote hate, violence or other forms of intolerance that is discriminatory.
However, the spokesman said PayPal regularly reviews accounts to ensure their use aligns with the companys acceptable use policy.
We carefully review accounts to ensure our services are used in line with our long-standing Acceptable Use Policy, and take action as appropriate.
We do not allow PayPal services to be used to promote hate, violence, or other forms of intolerance that is discriminatory, the spokesman said.
The spokesman added: We do not take decisions like these lightly, and we work hard to be rigorous and fair-minded when reviewing PayPal accounts.
Striking the necessary balance between upholding free expression and open dialogue and protecting principles of tolerance, diversity and respect for all people is a challenge that many companies are grappling with today.
We work hard to achieve the right balance and to ensure that our decisions are values-driven and not political.
It comes after PayPal banned US conspiracy theory website InfoWars in September because it was promoting hate and intolerance.
Almost 65,000 people signed a petition by global advocacy group SumOfUs calling on PayPal to cut ties with Robinson.
Tom Barns, campaigns manager at SumOfUs said: This is a big step forward. Hate crimes are on the rise across the UK and Europe, and fascists like Tommy Robinson need money to spread their message of hate.
Robinson – whose real name is Stephen Yaxley-Lennon – was also banned from Twitter in March.
PayPal said its platform could not be used to promote hate, violence or other forms of intolerance that is discriminatory
Earlier this week, Judge Nicholas Hilliard QC announced Robinson was no longer subject to any bail conditions after referring his contempt of court case to the Attorney General.
Robinson was freed from prison in August after three leading judges quashed a contempt of court finding made at Leeds Crown Court.
But he could be sent back to jail if he is again found in contempt for filming people in a Huddersfield grooming trial in Leeds and broadcasting the footage on social media.
The court heard that he denied breaching the Contempt of Court Act and making a broadcast likely to seriously prejudice the trial.
The announcement follows reports that Robinson could make more than £1 million from a potential trip to the US later this month.
Judge Hilliard had referred the case to Attorney General Geoffrey Cox QC after receiving a document from Robinson last month.
Had the case been heard by Judge Hilliard at the Old Bailey, witnesses, including Robinson, could not have been cross examined.