Here’s an excerpt from Arendt’s The Life of The Mind:
No one knew this better than Nietzsche, who, with his poetic and metaphoric description of the assassination of God, has caused so much confusion in these matters. In a significant passage in The Twilight of Idols, he clarifies what the word "God" meant in the earlier story. It was merely a symbol for the suprasensory realm as understood by metaphysics; he now uses, instead of "God," the expression "true world" and says: "We have abolished the true world. What has remained? The apparent one perhaps? Oh no! With the true world we have also abolished the apparent one"She notes that the concept of God’s death is not Nietzsche’s unique position because Hegel, in his Phenomenology of Spirit, has said that the "sentiment underlying religion in the modern age [is] the sentiment: God is dead.”
What Hegel (and Nietzsche) meant by the “God is dead” statement is that theology, philosophy and metaphysics have reached an end.
If we wish to trace the idea of God’s death (or the end of theology, philosophy and metaphysics) further back, we can look at the work of Immanuel Kant. Kant has not specifically pronounced the God’s death, but he talks about the end of traditional metaphysics even though he loved the subject. Here’s an excerpt from The Life of The Mind:
Kant in his pre-critical writings, where he quite freely admits that "it was [his] fate to fall in love with metaphysics" but also speaks of its "bottomless abyss," its "slippery ground," its Utopian "land of milk and honey" (Schlaraffenland) where the "Dreamers of reason" dwell as though in an "airship," so that "there exists no folly which could not be brought to agree with a groundless wisdom."