The guitarist is said to have been replaced by session musician Josh Klinghoffer, who has previously toured with the 'Under The Bridge' hitmakers.
A source said: "Josh Klinghoffer has been playing with the group for a couple of months now.
"Mentally, John checked out a long time ago. He's interested in doing his own thing, his own albums - the whole big rock band machinery just doesn't appeal to him anymore."
Josh has previously worked with artists including Tricky, PJ Harvey and Gnarls Barkley and the group are now exploring the direction he can help take their music in.
The source added to MusicRadar.com: "Josh has been on everybody's radar for quite some time. He's extremely popular within a certain circle of LA musicians.
"The big thing right now that the band will have to consider is, Can Josh write great songs? Can he help push them forward? Everybody knows he can play, but the Peppers need somebody who can come up with amazing material and get them moving again."
News of John's departure isn't likely to come as a surprise to many fans.
Last month, when quizzed on the guitarist's involvement with the group, drummer Chad Smith said: "Well...at this time I can't talk about that. I have been told to stay away from the John questions."
John previously quit the group in 1992, rejoining seven years later.