Volvo will continue to race in the V8s but Supercar series is resigned to losing the marque's performance car division, Polestar.
Polestar's Garry Rogers Motorsport has confirmed that 2016 season will be its last.
"We have enjoyed a good co-operation with Garry Rogers Motorsport and the championship organisers, but our strategy and business objectives requires us now to focus our attention to other technologies and championships in the near future," Niels Moller, chief operating officer of Polestar, said.
"We will of course support the program in order to achieve the best possible sporting results in 2016, however, we feel it is fair to all involved that we can provide a heads-up ahead of 2017 as early as possible."
Volvo entered V8 Supercars at the start of the 2014 season, entering a three-year contract with GRM that elapses at the end of this year.
Supercars CEO James Warburton said he was disappointed with the decision.