Joshua Onduso, 50, was working at The Reintegration Service in Thatcham, Berkshire, when he made the remarks.
He later told the head teacher he could not condone homosexual activity because of his Christian beliefs.
A National College for Teaching and Leadership panel found him guilty of unacceptable professional conduct.
Mr Onduso had denied allegations he demonstrated a lack of respect and tolerance for the rights and beliefs of others during a two-day hearing.
A teaching assistant who gave evidence said Mr Onduso replied that “gay people have a disease” before pointing to his head as he added “they have something wrong upstairs”.
The report said when he was asked about what he had told students earlier in the day, he responded that he had said gay people were “sick in the head”.
The head teacher told the hearing she was “shocked” when she twice asked Mr Onduso to clarify his position and he insisted his Christian beliefs meant he “did not condone what [gay people] do”.
Mr Onduso was suspended and later dismissed after the school, which is for 5-19 year olds, carried out its own internal investigation.
The report said the panel accepted Mr Onduso’s behaviour was out of character but there was no evidence to suggest his actions were not deliberate.
Mr Onduso acknowledged his comments were homophobic while giving evidence at the hearing but had “not been remorseful”, the report added.
Banning him from teaching indefinitely, the panel said his attitudes were “deep-seated” and led to “harmful behaviour” which further training would not help.