The investor's money helped the struggling bank avoid a state rescue during the financial crisis.
Bank of Ireland shares fell 5% in early trading, despite assurances from Mr Ross that the sale was not a "negative comment" on the firm.
Mr Ross's funds have reportedly made a profit of several hundred million euros on the original 300m-euro ($407m; Â£242m) investment.
The US investor is stepping down as a director of the bank with the sale of his stake.
Archie G Kane, chairman of the Bank of Ireland Group, paid tribute to the investor for showing confidence in the lender in the months after Ireland was forced into an international bailout in late 2010 following the banking and economic collapse.
"On behalf of the board I would like to thank Wilbur for his contribution, diligence and commitment as a board member. Wilbur was instrumental in the success of the 2011 capital raising and, throughout his tenure, we have benefited greatly from his insights," Mr Kane said.
Another major US investor, Prem Watsa, is expected to remain a major Bank of Ireland shareholder with a 5.8% stake.
US billionaire Wilbur Ross has sold his entire 5.5% stake in Bank of Ireland.