Team Australia on Saturday pulled out of the 2017 America's Cup citing financial constraints, ending Australia's hopes of reclaiming the coveted yachting trophy.
The Hamilton Island Yacht Club announced they were withdrawing Team Australia from the competition.
The decision followed a key meeting in San Francisco last week at which further details of the competition were discussed, Australian Associated Press said.
Australia, who won the America's Cup in 1983, have not challenged for the trophy since 2000.
But hope was renewed for the next Cup with their first team in more than a decade to be skippered by Olympic gold medallist and World Sailor of the Year, Mat Belcher.
Belcher and the crew were informed of the decision on Friday.
"We really thought that this was our time and our opportunity - we're very sad," Belcher told AAP.
Billionaire wine baron Bob Oatley, Hamilton Island Yacht Club owner and Sydney to Hobart veteran, conceded the mounting costs forced the withdrawal.
The Team Australia crew with CEO Iain Murray, Sandy Oatley, Bob Oatley, skipper Mathew Belcher and Oracle Team USA skipper Tom Slingsby prior to a training run on Sydney Harbour in March.
"The challenge was initiated with a view to negotiating a format for the 35th America's Cup that was affordable and put the emphasis back on sailing skills," he said.
"Ultimately our estimate of the costs of competing were well beyond our initial expectation and our ability to make the formula of our investment and other commercial support add up.
"We are bitterly disappointed that this emerging team of fine young Australian sailors will not be able to compete at the next America's Cup under our banner."
Belcher did not rule out Australia's challenge being revived if additional funding was forthcoming.
"If government funding came in or sponsors come in there's always that possibility," Belcher said. "We could do a late entry."
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