The 33-cap Wales international issued an apology but it has fallen on deaf ears with the Blues management choosing to dismiss him with immediate effect.
Henson had looked all set to re-build his international career after been named in their RBS 6 Nations squad for the 2012 tournament.
However after the Blues decision that future appears in doubt.
Blues chief executive Richard Holland said in a club statement: "The Cardiff Blues management have discussed the matter at length but have acted swiftly since the incident occurred on Saturday morning.
"Gavin admitted himself that his behaviour was totally unacceptable and the immediate termination of his contract sends out a clear message that behaviour like that will not be tolerated at the Blues.
"We have a duty to our supporters and sponsors to protect the good name of Cardiff Blues and those associated with our brand.
"Gavin Henson is obviously a talented rugby player and it's unfortunate that his career at the Blues has ended this way.
"However, we would like to thank him for his service and wish him the best of luck with his future career."