Rupert Murdoch's News International said it would close its free city newspaper, The Londonpaper, as part of cost-cutting measures.
The Londonpaper, one of three free publications circulated in the UK capital and employs 60 editorial staff, will cease publication within a month, according to a statement.
"The strategy at News International over the past 18 months has been to streamline our operations and focus investment on our core titles," James Murdoch who heads the company's Europe and Asia operations said.
The performance of the newspaper had "fallen short of expectations", he said, adding: "We have taken a tough decision that reflects our priorities as a business."
The Londonpaper, launched in 2006, recorded a pre-tax loss of £12.9 million ($21.2 million) last year, according to News International.
The company's UK papers suffered a 14 per cent drop in year-end advertising revenue, while profits across the global newspaper division fell from $786 million to $466 million.
Rupert Murdoch said earlier this year his News Corp media empire would begin charging for online content on its portfolio of titles, including The Wall Street Journal, the London Times and the New York Post (See: What would you pay to read this online?).