The Broadwood club announced late on Thursday night that it had started moves to terminate the deal.
The move had been agreed between the clubs after Rovers were engulfed in chaos and controversy following the striker’s arrival last month.
Goodwillie was ruled to be a rapist in a civil court in 2016, although no criminal proceedings followed.
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His signing engulfed the club in controversy.
Two directors quit, a host of volunteers walked out, and lifelong fan, team sponsor and former director Val McDermid severed all links with the club.
In the face of fierce criticism - which saw the issue commented on by First Minister Nicola Sturgeon, and raised in the House of Commons - Rovers apologised and began the process of extracting themselves from a contract which tied Goodwillie to the club until 2024.
This week it was announced he was returning to Clyde - where he had played for five years and was team captain - on loan for the rest of the season.
But the controversy surrounding the player simply followed him.
McDermid attacked the decision, describing it as “disgusting” and was backed by the First Minister who said it was “as wrong as the signing by Raith Rovers.”
Rape Crisis Scotland also branded it “a shameful decision.”
Clyde’s women’s team quit in protest at Goodwillie’s return, and the player also found himself banned from entering Broadwood Stadium by its owners, North Lanarkshire Council.
The local authority also said it was looking at not renewing the club’s stadium lease when it expires in 2023.
Tonight, in a bid to draw a line under the controversy, Clyde made a brief statement on Goodwillie’s loan.
It said: “The club are tonight in the process of terminating the loan agreement with Raith Rovers for David Goodwillie.”
No further details were given.