Volkswagen will quit the World Rally Championship at the end of the 2016 season.
Autosport's sources have confirmed the decision was taken at a board meeting in VW headquarters in Wolfsburg on Tuesday morning.
There had been hopes that VW could be granted a single-season extension to make use of the all-new 2017 specification Polo R WRC that it has developed, but those hopes were extinguished in the meeting.
Instead, the programme - like sister firm Audi's World Endurance Championship commitment - will be canned at the end of 2016.
VW has made no official comment on the decision.
Rally Australia, later this month, will mark the end of four hugely successful seasons at the top of world rallying for the team.
Sebastien Ogier and VW have dominated the drivers' and manufacturers' championships and taken 42 individual rally wins along the way.
The Volkswagen decision means next season's WRC - which features a new rules package with significantly faster cars - will be contested between series regulars Hyundai and M-Sport (Ford) plus returning championship giants Citroen and Toyota.
It also leaves reigning champion Ogier and rally winners Jari-Matti Latvala and Andreas Mikkelsen on the driver market.