Silverstone’s owners, the British Racing Drivers’ Club, have triggered the break clause in their contract to host the British Grand Prix.
The move means that under current terms, the final race at the venue will take place in 2019.
After months of deliberation, the BRDC felt that it could not afford to keep the race going because it was certain to lose money in the future.
That is because of a five percent escalator fee that British GP chiefs were supposed to pay, meaning the rights fee had jumped from an original £11.5 million in 2010 to £16.2 million in 2017.
By 2026, which was supposed to be the final year of the contract, the fee would be £25 million.
John Grant, Chairman of the British Racing Drivers’ Club, said: “This decision has been taken because it is not financially viable for us to deliver the British Grand Prix under the terms of our current contract.
“We sustained losses of £2.8m in 2015 and £4.8m in 2016, and we expect to lose a similar amount this year.
“We have reached the tipping point where we can no longer let our passion for the sport rule our heads. It would not only risk the very future of Silverstone and the BRDC, but also the British motorsport community that depends on us.
“However, I want to be clear that although we have now activated the break clause, we are fully supportive of the changes the Liberty team are making to improve the F1 experience.
“Our hope is that an agreement can still be reached, so that we can ensure a sustainable and financially viable future for the British Grand Prix at Silverstone for many years to come.”
The BRDC hopes that by cancelling the contract it can come to a fresh agreement with F1’s new owners Liberty Media to secure the future of the race beyond 2019.