Around 54,000 of the devices had already been produced by satnav maker TomTom, including some delivered to shops, before the error was discovered.
BBC Worldwide, the BBC's commercial arm, will now donate all proceeds from sales of the products, which cost £189 each, to Children in Need.
The TomTom Go Live Top Gear edition featured Clarkson giving directions in his own unique style, including lines such as: "Keep left - if you're not sure which side left is you really shouldn't be on the road."
However, executives at BBC Two felt that the product breached the corporation's guidelines, which stipulate that presenters "must take particular care not to endorse any product or service which could be covered in the programmes on which they work".
Worldwide said that no more Top Gear satnavs would be produced, while a plan to allow existing TomTom product owners to download Clarkson's voice has also been dropped.
A spokesman for BBC Worldwide said: "In order to avoid any perception of a conflict of interest in the minds of viewers, BBC Worldwide and TomTom have agreed that all monies that would have been due to BBC Worldwide will be paid to BBC Children in Need together with an additional charitable donation by TomTom.''
Top Gear is one of the BBC's most profitable brands, helping Worldwide to report record profits of £160 million in in 2010/11 on global sales of nearly £1.2bn.
Clarkson had no role in setting up the TomTom deal, and will not make any money from the sale of the 54,000 devices already made.
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