The president disavowed Mr Bannon after he was quoted in a new book describing a meeting between Mr Trump’s son and a group of Russians as “treasonous”.
The Russians had offered Donald Trump Jr damaging information on Hillary Clinton at the June 2016 meeting.
Mr Bannon’s quote appears in a new book by journalist Michael Wolff.
“Steve Bannon has nothing to do with me or my presidency. When he was fired, he not only lost his job, he lost his mind,” Mr Trump said in a statement on Wednesday.
“Steve was a staffer who worked for me after I had already won the nomination by defeating seventeen candidates, often described as the most talented field ever assembled in the Republican party,” he continued.
“Now that he is on his own, Steve is learning that winning isn’t as easy as I make it look. Steve had very little to do with our historic victory, which was delivered by the forgotten men and women of this country.”
Mr Bannon, the president’s former chief strategist, was considered a key player in the Trump White House and helped shape Mr Trump’s “America First” campaign message before he left his post in August.
He returned to his role as the head of the right-wing Breitbart News website, where he said he planned to help Mr Trump’s administration as a “wingman outside”.
Mr Trump reportedly spoke to Mr Bannon as recently as 13 December, the day of the special US Senate election in Alabama that saw the defeat of Republican Roy Moore, whom Mr Bannon supported.
The president reportedly spoke to his former chief strategist for 15 minutes, according to the New York Times.
White House spokeswoman Sarah Sanders said she believed Mr Trump’s last conversation with Mr Bannon took place “in the early part of December”.
The president’s comments came hours after the explosive new book, Fire and Fury: Inside the Trump White House, revealed that Mr Bannon called Mr Trump Jr’s meeting “treasonous” and “unpatriotic”.
How Trump cooled on Bannon
Speaking to the author, Mr Bannon said of the investigation into whether there was any collusion between Russia and the Trump campaign: “They’re going to crack Don Junior like an egg on national TV.”
Mr Wolff’s book also alleges that former UK Prime Minister Tony Blair told Mr Trump during a meeting last February that the British intelligence services may have been spying on him and his campaign, according to a report in The Times newspaper.
In March the then-White House press secretary Sean Spicer told journalists UK intelligence services could have been involved in an alleged spying operation on Trump Tower in New York. GCHQ said the allegation was “nonsense”.
Trump wiretapping claim: Did Obama bug his successor?
The Times says Mr Blair was hoping to get a job advising Mr Trump on the Middle East. A spokeswoman for Mr Blair told The Times that the allegations were a “total fabrication” and said Mr Blair had not suggested himself as Mr Trump’s Middle East envoy.
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