Jaguar is pulling its team out of Formula One at the end of this season.
The company made the announcement on Friday as part of a major shake-up by parent company Ford.
Jaguar chairman Joe Greenwell said: "Ford has decided it can no longer make a compelling business case for any of its brands to compete in F1."
Reports suggest Tony Purnell, head of Ford's premier performance division, is putting together a bid to buy Jaguar's Formula One operation.
Jaguar's F1 businesses are now up for sale, and the future of the Ford rally team remains uncertain.
The company's withdrawal of backing for the Cosworth engine division will also have repercussions for two F1 outfits.
Cosworth have provided subsidised engines for Jordan and Minardi in recent seasons, enabling the two minnows to continue in the sport, but that is now almost certain to end.
Greenwell added: "Having reached this decision our focus has turned to securing the best future for our F1 businesses and our employees in these businesses going forward.
"Jaguar's presence in F1 has been a valuable marketing and brand awareness platform particularly outside our main markets of the US and the UK.
"However it was our collective view that it is time for Jaguar Cars to focus 100% on our core business."
Ford's vice-president Richard Parry-Jones said the decision to pull Jaguar out was a warning that more needs to be done to help small manufacturers succeed in the sport.
The GPWC Holdings company has been battling for a greater slice of F1's profits on behalf of manufacturers.
But despite the promise of restructuring, the sport's commercial rights continue to be controlled by the holding company Slec - which is joint-owned by F1 supremo Bernie Ecclestone and three big banks.
"The GPWC has been too slow in making progress," Parry-Jones said.
"The current structure of F1 does not encourage smaller participants to make an investment.
"I think Jaguar's withdrawal will highlight the awareness of the need for change."
Jaguar's announcement came as Ford announcedit was ending production at its Jaguar plant in Coventry, with the loss of around 1,000 jobs.
Milton-Keynes based Jaguar entered Formula One in 2000 after Ford took over the Stewart team founded by three-times world champion Jackie Stewart in 1997.
They have had a turbulent four seasons, yet to win a grand prix and going through numerous changes of leadership since Stewart stood down as the first team principal before the start of the 2000 season.
Jaguar are a lowly seventh in the constructors' championship with 10 points.
The team's lead driver, Australian Mark Webber, will join Williams next season in a deal announced in July.