The former TOWIE star suffered moderate concussion after hitting her head while rehearsing with professional partner Mark Hanretty.
Doctors have said she must miss this weekend’s show and, according to the ITV show’s rules, she must therefore exit the competition.
Billie had already missed one week of the show due to a family bereavement.
An ITV spokesperson said in a statement: “During rehearsals for this week’s show, Billie Shepherd has had a fall.
“Taking the expert advice of the Dancing On Ice medical team, she sadly cannot perform this weekend and will therefore now withdraw from the competition.
“We wish Billie well as she now takes the time to rest and recover.”
Olympian Amy Tinkler and comedian Matt Richardson have already been drafted in to replace Denise and Rufus.
Denise had to withdraw from the show after partially dislocating her shoulder during training.
She fell during rehearsals for the series launch and made her debut on the ice with her shoulder strapped up.
Rufus was also forced to quit the show after testing positive for coronavirus, having previously missed a week of the competition due to having to self-isolate after coming into contact with someone who had the virus.
Dancing On Ice continues on Sunday at 6pm on ITV.