(CNN) -- Toyota, the largest car manufacturer in the world, has announced it is pulling out of Formula One.
In a statement on the official Formula One Web site the Japanese constructor confirmed they had decided to withdraw from the sport due to "current [and] severe economic realities."
The statement added: "Toyota is to leave Formula One having compiled 13 podium and 87 point finishes over eight challenging seasons since 2002.
"The experience provided an opportunity to develop both human resources and its research and development operations. Toyota expresses its deepest appreciation to its F1 fans and others for their warm support."
The constructor, who first entered the competition in 2002, is widely expected to post its worst ever financial results on Thursday having suffered a Y766bn ($8.5bn) net loss last year.
The decision, which means there is no Japanese automaker left in Formula One, is another blow to the sport which has also seen Honda and BMW withdraw from racing due to economic factors.
Toyota's decision also follows a recent exodus of Japanese manufacturers from motorsport with Kawasaki quitting MotoGP, Subaru and Suzuki ending their participation in the World Rally Championship and Mitsubishi pulling out of the Dakar Rally despite recent success.
The withdrawal means the Sauber team, recently sold to new owners after BMW's pullout, should now be assured of a place on the entry list for next year's championship.
The president of the Japanese constructor, Akio Toyoda, told reporters the decision had been a tough one but the current global financial situation meant that their hands were effectively tied.
"Based on the current economic environment, we realize we have no choice but to withdraw from Formula One," Toyoda said.
"This was a difficult but ultimately unavoidable decision. Since last year with the worsening economic climate, we have been struggling with the question of whether to continue or not.
"We are [now] pulling out of Formula One completely. I offer my deepest apologies to Toyota's many fans for not being able to achieve the results we had targeted."
Toyoda, who was visibly upset facing the media, apologized to supporters of the Toyota team who are now set to make 650 staff at their Cologne factory redundant.
"It's a complete withdrawal from F1. When I said a year ago we would continue, I had a serious intention to pursue that," he added.
"However, after making efforts over the last year, we've reached this decision. As to other international races, we will continue with those we are taking part in at the moment.
"Betraying the fans was a hard thing to do, and I was the one who made the final decision."
The news adds to the challenges facing new FIA president Jean Todt following the decision by Bridgestone -- F1's exclusive tire supplier last season -- to abandon the sport after its contract expired at the end of the 2010 season.