The 39-year-old is done with the Queen of Pop and has made fellow actress Cameron Diaz her new best friend, reported Us magazine.
"Everything always revolved around Madonna. She is finally done," a source said.
Paltrow, who has been pals with Diaz, 40, for years, has recently upgraded her to BFF status.
"Gwyneth is a nurturer. Cameron is bummed about being single, so Gwyneth sees her as a project," the source added.