Hamilton City Council has confirmed that 2012 will be the last year it hosts the V8 Supercars round.
The decision follows V8 Supercars Australia offer to Hamilton of $1.2 million in compensation if they decided to shorten the seven-year contract by two years.
Mayor Julie Hardaker made the announcement on Friday afternoon, saying the supercar race is more suited to another city which has corporate appeal such as Auckland.
Ms Hardaker says street racing is costly and the council has financially struggled to stage the event.
V8 Supercars chief operations officer Shane Howard said after the decision that there was no guarantee that any races will be held in New Zealand after next year.
Mr Howard says the economy, mixed with a lack of corporate interest, has forced the company to consider all options.
But New Zealand driver Greg Murphy is confident the country will not dropped from the circuit. He says the obvious venue to host a V8 Supercar round would be the Hampton Downs race circuit south of Auckland.