The 33-year-old defender looks set for a legal scrap with the Championship club after being given the boot for gross misconduct.
Despite clocking up in excess of 350 appearances for the Rams, Keogh’s deal was shredded after refusing to accept a pay cut.
Derby wanted to reduce his £25,000-a-week wages because he faces the prospect of more than a year on the sidelines due to a serious knee injury sustained in a car crash.
Keogh was in the back seat of Tom Lawrence’s Range Rover when it crashed into a lamp post after a boozy team bonding night out.
The Republic of Ireland international has 14 days to appeal and is consulting lawyers and the PFA over the matter.
He has the support of his wife Charlie, who changed her Instagram profile to include the words: “Wife to a professional scapegoat.”
Keogh was a long-time servant for Derby, having joined from Coventry for around £1m in 2012.
He led the Rams to last season’s Championship play-off final, where they lost to Aston Villa.
A club statement said: “Derby County Football Club has completed the disciplinary hearing regarding Richard Keogh in respect of his involvement in the events of Tuesday, September 24th.
“As a result of that process, Mr Keogh has had his contract terminated with immediate effect for gross misconduct. He has the right of appeal within 14 days.
“As we have said from the outset, the Club will not tolerate any of its players or staff behaving in a manner which puts themselves, their colleagues, and members of the general public at risk of injury or worse, or which brings the club into disrepute.
“The club will be making no further comment at this time regards this matter, until the conclusion of any potential appeal.”
Lawrence and Mason Bennett, who was also involved in the car crash, were fined, banned from driving for two years and ordered to carry out 180 hours of unpaid work after being charged with drink driving.
The pair were also fined six weeks’ wages by Derby.