World champion manufacturer Volkswagen will quit their WRC campaign at the end of the 2016 season in Australia this month.
The German outfit has dominated the sport since its return in 2013 - winning the manufacturer's title on all four occasions while star driver Sebastien Ogier won four successive drivers' titles.
Autosport magazine is reporting the decision was taken at a board meeting in VW headquarters in Wolfsburg overnight. The magazine says hopes of a one-year stay of execution in 2017 were dashed.
Sister company Audi announced last week they were withdrawing from the World Endurance Championship in the wake of the emissions scandal that engulfed Volkswagen last year.
Volkswagen has three drivers contracted for next season - Ogier, Finn Jari-Matti Latvala and Norway's Andreas Mikkelsen.
Ogier has hinted at retirement in the next year or two and this decision could fast-track that decision while he could look to return to Citroen, where his WRC career began, or link up with friend Malcolm Wilson at M-Sport Ford.
Citroen, who return fulltime to the WRC next year, have recently announced their three drivers for 2017 - Brit Kris Meeke, Irishman Craig Breen and Frenchman Stephane Lefebvre.
Ford has yet to commit to any drivers beyond young Frenchman Eric Camilli.
Toyota are also making their return to the championship have announced the signing of Finn Juho Hanninen but have spaces available for any of the departing Volkswagen drivers.
With promising Estonian Ott Tanak and veteran Norweigian Mads Ostberg without confirmed drives there will be serious competition all of a sudden for the remaining seats at Ford and Toyota.