"After the events of the last few days, Mark Penn has asked to give up his role as chief strategist of the Clinton Campaign," the Clinton campaign said in a statement.
It was revealed last week that Penn's public relations company, Burson-Marsteller, had been hired by Bogota to promote a free trade pact between Colombia and the United States -- a treaty which Clinton has opposed.
Penn, who is the company's chief executive, said last week he had made "an error in judgement" in meeting with the Colombian ambassador to the United States, Carolina Barco, on March 31, and said he would not make the same mistake again.
The Colombian government retaliated by firing Burson-Marsteller, saying in a statement that it "considers this a lack of respect to Colombians, and finds this response unacceptable."
The Clinton campaign said in a statement Sunday: "Mark, and Penn, Schoen and Berland Associates, Inc. will continue to provide polling and advice to the campaign."
It is yet another blow to Clinton, locked in a bitter battle with rival Barack Obama for the Democratic party nomination to stand in November's presidential elections against Republican John McCain.
Shaken by the tough fight, the New York senator had replaced her campaign manager Patti Solis Doyle in February with a longtime Clinton insider, Maggie Williams, in a bid to put her White House bid back on track.