According to The Mirror, bosses have decided to drop the 39-year-old and other experienced stars in favour of younger faces. More departures are expected to be confirmed before the new series launches in the autumn.
The move leaves the BBC open to fresh allegations of ageism amid the continuing controversy surrounding 66-year-old Arlene Phillips, who was recently sacked from the judging panel and replaced by popstar Alesha Dixon, 30.
An insider revealed: "Karen is gone and it is no surprise seeing what is happening to older females at the BBC. As far as the bosses are concerned they are keeping things fresh and exciting, but some viewers may see it as ageism.
"Karen wants to branch out with her work, but the BBC were happy for her to leave. They made the decision. Despite Karen being one of the best dancers she is gone, and it seems to be another sign that bosses want to make the series younger to try to take some of the X Factor audience."
Hardy made her Strictly debut in 2005, dancing with TV host Bill Turnbull. In 2006, she triumphed alongside cricketer Mark Ramprakash on the show and went on to appear in two further series.
The BBC's Strictly revamp has so far sparked more than 1,000 viewer complaints and led to some fans threatening to boycott the show.