The contract caterer confirmed it was removing the product completely from its Approved Product List (APL) yesterday, although said it had only been used in a small number of sites.
Compass's group managing director Ian Sarson said he was proud the company had taken the decision and that it was being supported throughout the business.
"Ethically we feel strongly that we should not be sourcing this product and this has been backed up by the support we’ve received across the organisation," he said.
The production of foie gras is banned in the UK due to the controversial way it is made. However, restaurants are legally allowed to sell the product which is made after ducks and geese are force fed via a tube creating fatty livers.
Compass's move comes after PETA launched an online campaign urging it to stop serving foie gras across its business, which includes the restaurants Rhodes 24 and Roux at Parliament Square.
PETA, who had held talks with Compass before the contract caterer made its decision, praised the move. UK associate director Mimi Bekhechi said: "We're delighted that Compass Group has found its 'moral compass' and agrees that serving up the grotesquely enlarged livers of force-fed ducks and geese is indefensible."
Nick Vadis, UK executive chef at Compass said chefs working for the company had no need to use foie gras any longer.
“As chefs, we are now really fortunate to have an amazing array of outstanding ingredients to choose from when developing our menus. With this variety of produce now available to us, I don’t believe there is a need to put foie gras on our menus given how it is produced, and I am very pleased that Compass has decided to remove it from its APL," he added.
Other companies who have pledged never to serve or sell foie gras include Harvey Nichols and Selfridge's and last month the US state of California took the decision to ban its sale completely.
Earlier this year the BBC was criticised for allowing chefs Aiden Byrne and Johnnie Mountain to use the French delicacy on its Great British Menu series, receiving more than 400 complaints from viewers.