I agree, terminate immediately. The parents have had plenty of opportunities to work with you on it, and have chosen to remain blind this behaviour instead.

It probably would have been a good idea to discuss with parents when it first started (at the beginning of care, from the sounds of it) that his behaviour needs to change within a 2-3 weeks or he'd be terminated. From the sounds of it the parents need to get it through their heads that his behaviour is SERIOUS, something they've been unable to do thus far.

I feel like you could say "this is a final warning, the next violent outburst will result in the child being terminated immediately, and parents will be called for pick up," but honestly, what if the next violent outburst breaks a babies arm? It's much safer to just let him go immediately.