Sunderland told him there is no way back for him at the club following his drug shame.
Gibbons was found to have cocaine and cannabis in his blood stream.
He admitted two breaches of the FA’s anti-doping regulations after testing positive for two prohibited substances following his side’s under-18 league match against Aston Villa on September 22, 2012.
Sunderland Academy Manager Ged McNamee: “Lewis not only let our club down, he let himself and his team-mates down massively.
“We took the strongest possible action in terminating his contract as every footballer knows the severe consequences of this type of offence.
“We have, however, worked to ensure support and assistance was available to the player and his family through what has undoubtedly been a difficult and challenging time for them.”
Sunderland’s chief executive Margaret Byrne: “Empowering and educating our young people to make the right choices and decisions, both on and off the field, is fundamental to our Academy philosophy and ethos.
“We expect the highest standards of all players who have the honour of being part of Sunderland AFC, which is why this came as such a shock.
“It was enormously disappointing for everyone at the club who works so hard to support our young players and give them every opportunity to make it as professional footballers.
“We are strong advocates of the rigorous testing programme our sport adheres to.
“We will continue to educate and advise all of our young players as to the enormous dangers of drug use. “
Gibbons’ suspension has been back-dated to October 18 2012, which was the date the FA provisionally suspended him.
He will be subject to target testing for a period of two years from October 18 2014.