South Africa will no longer have quotas for non-white players in sports teams.
Pietersen moved to England after becoming frustrated by the policy
The policy has caused controversy in rugby and cricket, and was cited by England batsman Kevin Pietersen as the main reason he left the country.
Sports minister Makhenkesi Stofile says the focus will switch to helping black athletes by investing £15m a year.
"Quotas are out. We are not going to decide who must be on the team. All we are saying is expose everybody, give them an opportunity," Stofile said.
The presence of only two non-white players in South Africa's World Cup-winning rugby team's starting line-up, 13 years after the end of apartheid, led to a new debate over the progress of black sportsmen and women.
World Cup winning coach Jake White was not in favour of quotas, saying the team should be selected on merit.
The BBC's correspondent in Cape Town, Mohammed Allie, said: "The idea of quotas is still favoured by a marginal majority, according to a survey."
He added previous claims by political leaders that sporting success was not as important as bringing through black sporting talent had been revised after the Springboks' triumph in France.
"The World Cup being paraded around for four days has brought home to people how important it is to have winning teams," Allie said.
"And that's why so much is being put into the team for the 2010 football World Cup - it will be a disaster if the team does not get past the first stage."
Stofile, previously a staunch supporter of quotas, said the experiment had failed but insisted black sporting success stories could be created with the correct funding.
"Quotas were used only for window dressing for international consumption," he added.
"We must kill the myth that black people cannot play certain sporting codes because they are black.
"Let us put our resources into the development of talent."