The 49-year-old singer walked out on the British reggae group - who formed in Birmingham in 1978 - after his bandmates, including his brother Robin, accused him of putting his own solo career ahead of the band.
Things reportedly came to a head when Ali demanded the release of the new UB40 album "24/7" - which is due to out in May - be delayed so it didn't affect his own LP sales.
A source said: "It is a case of the lead singer thinking he's better than everyone else."
"He went off to do his own solo album and was getting paid large amounts to play corporate shows while the rest of them sat at home. He basically sold out, it became about making money rather than the band."
A UB40 spokesman assured fans the remaining seven members - lead guitarist and vocalist Robin Campbell, drummer James Brown, bassist Earl Falconer, trombonist Norman Hassan, saxophonist Brian Travers, keyboardist Mickey Virtue, and trumpeter Astro - would continue to perform.
They said: "Ali is focusing on his solo career and couldn't commit to UB40. The group will continue to record and perform with the existing seven members."
The band's last shows with Ali will take place next month in Australia, New Zealand and Uganda.
UB40 are one of the most successful reggae acts of all time, selling in excess of 70 million records worldwide and touring the world six times.
The band's hits include "Red Red Wine," "Kingston Town" and "Rat In Mi Kitchen."
