Alastair Campbell says he no longer wants to be a Labour member, claiming the party is facing an "existential crisis" due to poor leadership.
Tony Blair's ex-spin doctor had planned to challenge the decision to kick him out after he admitted voting Lib Dem.
But he said he did not want to return because Labour had been "taken over" and it was "time to stop pretending" it was the party it used to be.
Jeremy Corbyn said he was "disappointed when anyone resigns or leaves".
Mr Campbell told BBC Radio 4's Today programme Mr Corbyn "has not led on Brexit" or "the anti-Semitism issue", and the leadership "kid themselves that there's a policy agenda that the country out there is even aware of".
"What you have to do in opposition to win against a ruthless Tory Party, you have to do far more that is being done now. And we have to be honest about that."
He said he feared Prime Minister Boris Johnson was trying to "clear the decks towards a general election" because he believed the Labour leader's "weakness" made a Conservative victory more likely.
"He thinks, probably rightly, that the country has decided it will not put Jeremy Corbyn into office," Mr Campbell continued.
"I think there is a danger that we're going to be destroyed as a serious credible political force unless we face up to the reality of what's going on."
The BBC's assistant political editor, Norman Smith, said Labour would point to the fact that Mr Corbyn did far better in the 2017 general election than anyone expected, depriving Theresa May of a majority.
Mr Campbell said he voted Lib Dem in May's European elections because he wanted to support an unequivocally pro-Remain party.
Labour said at the time his expulsion was "automatic" because he had admitted voting for another party.
Asked whether he would now join the Liberal Democrats, he said he was not "close to other parties" and had not yet decided who to vote for at the next election.
In an open letter to Mr Corbyn, published in The New European magazine, he said he hoped to one day rejoin a party "that genuinely appeals to the many not the few".
Mr Campbell said a member of Mr Corbyn's team had contacted him suggesting he might be allowed back into the party, either by suspending his automatic exclusion during a review of the party's disciplinary rules, or if he made a public commitment to vote Labour at the next election.
However, he said he wanted his expulsion overturned, not suspended, and did not want to rule out advocating tactical voting in the future due to his "acute" concerns about the Labour leader's stance on Brexit.
Speaking to reporters during a visit to Lancashire, Mr Corbyn said he was "disappointed when anyone resigns or leaves the Labour Party".
However he added that the party has "half a million members who are very keen to get out there and campaign on issues of social justice".
Earlier, shadow climate minister Danielle Rowley said : "The Labour Party has always been and remains a broad church - there's lots of different viewpoints".
"I'd like it if he could get on board, but it seems he really doesn't want to do that."
Who is Alastair Campbell?
Mr Campbell was a political journalist before coming to prominence in Whitehall as a key member of the Labour PM's staff in 1994.
He served as Mr Blair's chief press secretary until 2000 and was a controversial figure, heavily involved in policy, including over the Iraq War.
Since leaving government, he has opened up about his struggles with depression and alcoholism, and works with a number of charities.
He also campaigns for the People's Vote and is editor-at-large of The New European magazine.