 RBS began its sponsorship of the Williams F1 team in 2005
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The Royal Bank of Scotlandwill halve its funding of British sport as a result of the global economic downturn.
BBC Sport has learned the bank will end its sponsorship of the Williams Formula One team at the end of 2010.
It will also review its deals with individuals such as tennis star Andy Murray and cricketer Sachin Tendulkar.
RBS, expected to announce a loss of up to £28bn on Thursday, is reviewing all sponsorship activity as part of its strategic review.
The bank, in which the government has a stake of almost 70%, has also cancelled trackside advertising for 2010, while hospitality costs in all its sponsorships have been reduced by around 90% in 2009.
However, it recently extended its sponsorship of the Six Nations rugby union championship for a further four years in a deal worth £20m.
Williams defiant despite sponsor withdrawal
"We recognise that we are now operating in a very different economic environment and have been reviewing all of our activities since October," said Dr Andrew McLaughlin, RBS group director.
"It is imperative that we respond to the reality of the situation we face and that we do so in an orderly way that respects the commercial agreements we have in place and the implications for our partners and the jobs they support."
The news that RBS will end its partnership with Williams, thought to be worth around £10m a year and amounting to around 10% to 15% of the team's budget, is another blow to the Oxfordshire-based team and F1 in general.
The sport is already going through a tough time, having seen Honda withdraw from the sport and Renault lose their main sponsor, ING, from 2010.
As for Williams, they have already lost their sponsorship deals with Baugar, Lenovo and Petrobras.
And as one of the few independent teams in F1, they rely largely on sponsorship as their main source of income, as much as 70% according to team principal Sir Frank Williams.
 Murray is ranked fourth in the world
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"The cars have relatively short lives, and engines and aerodynamics and advancements are needed all the time."
Despite the RBS announcement, Williams insisted the future is not as bleak as it may seem.
"RBS has been a great partner for this team and we are grateful for the way that they have handled this difficult situation," he said.
"We are in a strong position to ride out the inevitable challenges of the next two years.
"RBS is showing great responsibility to the role that we play in the British economy, supporting over 500 highly skilled technology jobs in a sector in which Britain leads the world.
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Williams says there is a "95% chance" the team will be able to name a replacement for RBS within the "next 12 months" and said it was well covered for this season and next.
However, he admitted it is getting harder to attract sponsors in the current economic climate.
"We have to work hard to find them, keep them and look for others all the time," he told BBC Sport.
Williams has won seven drivers titles in its history, but the last was delivered by Jacques Villeneuve in 1997.
In 2008, the team celebrated its 500th Grand Prix, but finished eighth in the championship.
Meanwhile, Murray has already indicated he may be willing to renegotiate his sponsorship contract with RBS to reward the troubled bank for its loyalty to him.
The Scot, now 21, began his association with RBS when he was 13 and has risen more than 400 places in the world rankings since then.
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