CYBG, which also owns the Clydesdale and Yorkshire Bank brands, canned the long-term deal with Jenkins's fintech start-up 10X Future Technologies following its £1.7bn takeover of Virgin Money in September.
Under the contract, 10X was helping Virgin Money create a digital platform for an online bank using the brand founded by Sir Richard Branson.
A spokesman for CYBG told Sky News: "10x Future Technologies has been a valuable partner to Virgin Money through its digital journey.
"However, since we first announced our proposed acquisition of Virgin Money we have been clear that we plan to use CYBG's existing iB technology platform - designed for the world of Open Banking - to support our 6m customers.
"We have informed 10x of our intention to exit the agreement with Virgin Money. We wish the 10x team the very best for the future."
The news serves as a blow to Jenkins, who was ousted as Barclays chief executive in 2015 after three years in the role, as he was understood to have been in talks with investors for several months about a substantial new funding round for his venture.
Virgin Money was said to have committed tens of millions of pounds.
CYBG's decision to end the deal is expected to result in a sizeable payment to 10x.
A 10x spokesman insisted that the business was "in good shape, with a strong pipeline and many opportunities ahead of us". He said 10x had already signed additional clients but declined to name them.
He added: “We remain focused on the continuing development of our technology platform, having recently carried out the first live real money and merchant transactions across our platform at the end of October."