Hi 

To remove a custom report in workspace should be as simple as selecting the report and clicking the remove option.
See the following help.k2.com article

https://help.k2.com/onlinehelp/k2blackpearl/userguide/4.7/default.htm#5.Reports/WS_Custom_Reports.htm
Under the Configure existing Custom Reports, you can see the remove/delete options displayed there. (either removing the Category, or deleting the report itself)

If the above is different that what you see on your environment. Can you attach a screenshot showing the difference you see. Also What version of K2 are you on?

Thanks. This is what I needed.