Five has axed Family Affairs after more than eight years and 2,250 episodes.
Family Affairs won two awards at the British Soap Awards in May
The last episode of the long-running soap, launched in March 1997, will be broadcast at the end of the year.
"This was a very difficult decision but we felt the series had come to the end of its natural lifespan," said Five's director of programmes, Dan Chambers.
Former BBC One controller Lorraine Heggessey, chief executive of production house Talkback Thames, said she was "disappointed" by the news.
"I respect the decision and understand the reasons behind it," she said.
"However, I'm disappointed as I felt we had bright new plans for the show, including some strong new actors."
The cast were told the news on Monday night at the show's studios in Merton, south London.
"I'd like to thank every single member of the cast and crew for their tremendous hard work and creativity over the last eight years," said Mr Chambers.
"We remain committed to original drama and will be using the budget allocated to Family Affairs to fund a range of programming, including several new primetime drama projects."
The end of the show will provide Five with an estimated £10m to invest in other projects.
Family Affairs was the first UK-wide soap to regularly transmit five days a week since the 1960s, and also the first to offer viewers the opportunity to determine the outcome of a storyline.
Set in the fictional London suburb of Charnham, the show won two British Soap Awards earlier this year.
The show originally focused on a single family, the Harts, but was revamped after they all perished in a freak boating accident.
In a recent storyline Trish (Gabrielle Glaister) has become a mother
"Family Affairs has told controversial stories with power and integrity," said Johnathan Young, head of drama at Talkback Thames.
"I know there will be many disappointed by the news, but we must move forward and I'm excited about working with Five on new projects."
The show will continue in production until the end of October, with the final episode broadcast in December.
Last week the show attracted an average audience of 900,000 viewers.