Ms Brennan’s resignation left Labour with 18 of the 54 seats, the Greens with 19 and the Tories with 13.
Pictures of Ms Brennan holding up a sign calling Israel a “racist, apartheid state” had given to local newspaper The Argus.
In April, Cllr Brennan had also described criticism of her conduct on antisemitism as “white supremacy”.
The duo’s departure came less than a week after the Labour administration was rocked by the suspension of one of its leading councillors, Anne Pissaridou, over the sharing of allegedly antisemitic material on social media.
All three councillors had been on the pro-Jeremy Corbyn slate of Momentum backed candidates at last year’s elections.
Local Labour MP Peter Kyle tweeted: “In recent years voters, especially the Jewish community, have told Labour they want action not words.
“This is action, not words.
“This is Labour getting its house in order.”
Labour council leader Nancy Platts emailed her party on Monday evening: “I have just received notification that Cllr Brennan has resigned from the Labour Party and is no longer a member of the Labour Group.
“I understand the Council will be putting a statement out this evening.”
A Brighton and Hove City Council spokeswoman said: "Councillor Nichole Brennan has today resigned from the council’s Labour Group with immediate effect.
"Councillor Brennan is now an independent councillor representing the East Brighton ward in the city.
"We will update as soon as possible on the implications of this announcement for the council."
