The 38-year-old failed to pay the WBO a $200,000 (£128,000) sanctioning fee by the 3 July deadline. Mayweather had been expected to relinquish the title by now, saying he planned to do so following his points victory over Pacquiao. Fellow American Timothy Bradley will now become the full belt holder.
After Mayweather defeated Pacquiao, he had declared he would vacate all his titles in order to give younger fighters the chance to win belts.
"The WBO World Championship Committee is allowed no other alternative but to cease to recognize Mr Floyd Mayweather Jr as the WBO welterweight champion of the world and vacate his title." said a statement on wboboxing.com. Mayweather, who still holds the WBA and WBC belts at welterweight, has until 20 July to appeal against the decision.
The fighter has 14 days to appeal the WBO's decision. The title is expected to go to Timothy Bradley, who beat Jessie Vargas in an interim title bout last month, if the Mayweather issue is not resolved by then.
"Despite affording Mr. Mayweather Jr. the courtesy of an extension to advise us of his position within the WBO Welterweight Division and to vacate the two 154-pound world titles he holds, the WBO World Championship Committee received no response from him or his legal representatives on this matter," the WBO said on its website.
"The WBO World Championship Committee is allowed no other alternative but to cease to recognize Mr. Floyd Mayweather, Jr. as the WBO Welterweight Champion of the World and vacate his title, for failing to comply with our WBO Regulations of World Championship Contests."
Undefeated in 48 fights, "Money" Mayweather told a press conference after the Pacquiao fight that he'd consider relinquishing his WBO, WBA and WBC welterweight belts to give "younger guys an opportunity."
"I'm not greedy. The other guys need a chance. It is time they fight for the belts," he said.