The fashion chain, which sources 700 million pounds worth of clothing from India each year, said it had cancelled all orders from the three companies based in Tirapur region of the Tamil Nadu, and removed all their garments from its shelves.
Founded in 1969 in Dublin, the retailer which operates 170 stores in the country has grown to become the UK's second biggest clothing chain by offering cut-price fashion, with T-shirts for as little as one pound. Almost its entire range is sourced from low-cost suppliers in Asia.
The company said it had axed the suppliers - one of whom has been producing garments for the chain since 1996 - for "failing to meet its strict ethical standards".
It said a detailed investigation has found that the three companies had sub-contracted embroidery and sequin work to a number of unapproved businesses where children were involved.
George Weston, chief executive of Associated British Foods, the parent company of Primark said: "We are appalled, we feel let down and we are taking all the action we can to prevent this happening again."
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The move comes after an investigation by the BBC Panorama team whose findings are due to be broadcast next Monday.
Campaign groups rounded on Primark for dropping the suppliers rather than working with them to improve working conditions.