Chief customer officer Catriona Larritt said the airline had been operating on the route for nearly three and a-half years, "and we've appreciated the support we've received from local travellers and airports. However, the route has not performed as we'd hoped".
Passengers with bookings after May 29 would be contacted and offered alternative services via Auckland, or a full refund.
Jetstar's Auckland-Dunedin schedule of eight return services a week was unchanged.
Dunedin Airport chief executive Richard Roberts said he was disappointed with the news, but understood the airline's position.
"The Wellington route is a particularly difficult one to sustain and we appreciate that the airline needs to look at what routes make economic sense.
"We have worked with Jetstar since the launch of the Wellington route to promote both the service and the destinations, but unfortunately this hasn't been enough to retain the service."
Airport business development general manager Megan Crawford said the Wellington market was usually a business market, and leisure traffic was difficult to generate.
The Jetstar service was more aligned to the leisure market, as it took off later in the day, rather than the early-morning flights business people usually took.
Crawford said there would still be plenty of flights to and from Wellington through Air New Zealand.
Jetstar said it would increase flights between Wellington and Queenstown.
Larritt said from late October, it would double services to six return flights a week.
