The Southern District Health Board says the Otago Fertility Service will be outsourced to the private sector.
The board has been reviewing the future of the service since April this year and staff were informed of the board's decision on Monday.
In October, the DHB decided to end its breast screening service from July 2014 - also outsourcing it to a private agency.
The fertility service has about 10 employees including doctors, nurses, technical and administrative staff.
DHB medical director Marion Poore says the service is not breaking even financially and has had problems keeping staff.
Ms Poore says outsourcing the service is the best way to keep it high quality and free.