The £85m repairs contract started in May 2010 and was due to last until 2020 covering 17,500 properties across the capital.
But Peabody confirmed to the Enquirer today that the contract has been cut short.
Osborne will continue to carry-out repair work until the autumn while Peabody looks for a replacement contractor.
The Trust today formally invited contractors to bid for a £16m a year estate package, which is expected to be split between three contractors to cover interior refurbishment, exterior works and estate landscape improvements.
Sandra Skeete, Peabody Executive Director, Customer Services, said: “We know this is disappointing news for everyone who has worked hard to deliver this service over the past two years.
“At Peabody, our next step is to select another responsive repairs contractor who can build on the improvements that have been achieved, while also ensuring our customers continue to receive a high quality service.”
Nick Sterling, Managing Director of Osborne’s Property Services team, said: “This decision was made by mutual consent as it became clear that the current arrangements were not serving either party’s requirements.
“We will continue to deliver Peabody’s responsive repairs service until autumn, minimising the impact to residents.”