diff --git a/dvc/scm.py b/dvc/scm.py
index 2c8cdf78e..865388b0c 100644
--- a/dvc/scm.py
+++ b/dvc/scm.py
@@ -23,6 +23,9 @@ class Base(object):
     def ignore(self, path):
         pass
 
+    def ignore_remove(self, path):
+        pass
+
     def ignore_file(self):
         pass
 
@@ -68,7 +71,7 @@ class Git(Base):
         git_dir = os.path.join(root_dir, Git.GIT_DIR)
         return os.path.isdir(git_dir)
 
-    def ignore(self, path):
+    def _get_gitignore(self, path):
         entry = os.path.basename(path)
         gitignore = os.path.join(os.path.abspath(os.path.dirname(path)),
                                  self.GITIGNORE)
@@ -77,6 +80,11 @@ class Git(Base):
         if not gitignore.startswith(self.root_dir):
             raise FileNotInRepoError()
 
+        return entry, gitignore
+
+    def ignore(self, path):
+        entry, gitignore = self._get_gitignore(path)
+
         ignore_list = []
         if os.path.exists(gitignore):
             ignore_list = open(gitignore, 'r').readlines()
@@ -90,6 +98,20 @@ class Git(Base):
 
         open(gitignore, 'a').write(content)
 
+    def ignore_remove(self, path):
+        entry, gitignore = self._get_gitignore(path)
+
+        if not os.path.exists(gitignore):
+            return
+
+        with open(gitignore, 'r') as fd:
+            lines = fd.readlines()
+
+        filtered = list(filter(lambda x: x.strip() != entry.strip(), lines))
+
+        with open(gitignore, 'w') as fd:
+            fd.writelines(filtered)
+
     def add(self, paths):
         self.repo.index.add(paths)
 
diff --git a/dvc/stage.py b/dvc/stage.py
index 29ddefbf5..0a180c67f 100644
--- a/dvc/stage.py
+++ b/dvc/stage.py
@@ -242,6 +242,7 @@ class Output(Dependency):
         self.project.logger.debug("Removing '{}'".format(self.path))
         os.chmod(self.path, stat.S_IWUSR)
         os.unlink(self.path)
+        self.project.scm.ignore_remove(self.path)
         if os.path.exists(self.cache):
             os.chmod(self.cache, stat.S_IREAD)
 
diff --git a/tests/test_scm.py b/tests/test_scm.py
index f3aaeed47..aa54661eb 100644
--- a/tests/test_scm.py
+++ b/tests/test_scm.py
@@ -42,3 +42,6 @@ class TestIgnore(TestGit):
 
         git.ignore('foo')
         self.assertEqual(self._count_gitignore(), 1)
+
+        git.ignore_remove('foo')
+        self.assertEqual(self._count_gitignore(), 0)