Selective removal of endoplasmic reticulum (ER) is important for cell health. Macroautophagy is the primary mechanism for removal of ER, but ER can be cleared in a macroautophagy-independent manner. However, the physiological relevance and mechanisms underlying macroautophagy-independent ER clearance remain largely unknown. Here we show that ER is cleared by lysosomes in a macroautophagy Atg gene-independent manner during development. This developmentally programmed Atg-independent ER clearance by lysosomes requires the ER protein Vap33 that promotes ER and lysosome contact. Oxysterol binding protein (Osbp) is known to associate with Vap33, and Osbp lysosomal localization is required for ER clearance in cells lacking macroautophagy. Significantly, the cholesterol transport-associated protein Start1 regulates ER and lysosome contact, macroautophagy-independent ER clearance, and cholesterol transport from ER to the lysosome. These studies reveal that Vap33, Osbp, and Start1 promote ER clearance by lysosomes that is associated with cholesterol trafficking.