The Scottish branch of the foundation has been in dispute with the banking group over a new covenant, drawn up in the wake of the huge losses incurred by the group as a result of the banking crisis.
In December, Lloyds agreed new funding settlements with foundation branches in England and Wales, Northern Ireland and the Channel Islands. Funding for these branches will increase over the next four years, but their entitlement to the group's profits in the long term will halve. The Scottish foundation refused to agree to a similar settlement.
The group has confirmed that the existing covenant with the Scottish foundation, which says that 1 per cent of Lloyds Banking Group's pre-tax profits should be allocated to the Lloyds TSB foundation every year, will be terminated at the end of a nine-year notice period.
The Lloyds Banking Group will set up a new foundation, the Bank of Scotland Foundation, through which it will award all of its Scottish grants.
Mary Craig, chief executive of the Lloyds TSB Foundation for Scotland, said the Lloyds Banking Group had also refused to approve the foundation's decision to reappoint its chair, Christine Lenihan, for another year.
"It is hard to see either action as anything other than a vindictive attempt to punish us for not agreeing to their proposal to cut our funding and reduce our independence," she said.
A spokesman for the Lloyds Banking Group said: "After a series of discussions, the group confirms that it has regrettably served notice to the Lloyds TSB Foundation for Scotland that its funding relationship will end in nine years' time.
"Until then, it is likely that the foundation will continue to be one of the biggest charitable donors in Scotland."