The Malaysian GP will be dropped from the 2018 calendar in a joint decision by F1 and Sepang International Circuit.
First held in 1999 and subsidised by the government, the race has long struggled to get a full crowd and break even.
As previously announced the French GP returns to the calendar next year, while Hockenheim’s ongoing contract – which only covers even-numbered years – means that the German GP will bring the schedule up to 21 races.
“It’s always sad to say goodbye to a member of the Formula 1 family,” said F1 commercial boss Sean Bratches. “Over nearly two decades, the Malaysian Formula 1 fans have proven themselves to be some of the sport’s most passionate supporters.
“As we said in Melbourne, we have big plans for bringing our global fan base closer to the sport than ever before, providing an enhanced digital experience and creating new events. We’re looking forward to talking more about these plans as the season progresses.
“We will have 21 exciting events to look forward to in the 2018 calendar, with the additions of the French and German races.”