Inspired by recent observations suggesting that photospheric magnetic flux cancellation occurs much more frequently than previously thought, we analytically estimated the energy released from reconnection driven by photospheric flux cancellation, and proposed that it can act as a mechanism for chromospheric and coronal heating (Priest et al. 2018). Using two-dimensional simulations we validated the analytical estimates and studied the resulting atmospheric response (Syntelis et al. 2019). In the present work, we set up three-dimensional resistive MHD simulations of two cancelling polarities in a stratified atmosphere with a horizontal external field to further validate and improve upon the analytical estimates. The computational evaluation of the parameters associated with the energy release are in good qualitative agreement with the analytical estimates. The computational Poynting energy flux into the current sheet is in good qualitative agreement with the analytical estimates, after correcting the analytical expression to better account for the horizontal extent of the current sheet. The atmospheric response to the cancellation is the formation of hot ejections, cool ejections, or a combination of both hot and cool ejections, which can appear with a time difference and/or be spatially offset, depending on the properties of the cancelling region and the resulting height of the reconnection. Therefore, during the cancellation, a wide spectrum of ejections can be formed, which can account for the variety of multi-thermal ejections associated with Ellerman bombs, UV bursts and IRIS bombs, and also other ejections associated with small-scale cancelling regions and spicules.