In a statement, the ferry firm said “Over the past 18 months, [we have] worked extensively to try and find a sustainable solution that would allow the service to return.
“Unfortunately, despite exhausting every possible avenue, no viable proposals or interested parties have emerged.
“We would like to thank everyone who has supported the ferry during this challenging time.”
In 2023, Isle of Wight ferry firm Red Funnel took over The Hythe and Southampton Ferry Company, which operates the passenger link across Southampton Water.
In December last year, Red Funnel was acquired by investment firm Njord Partners, which decided it was not best suited to operate the Hythe service and the ferry firm began looking for someone to take it on.
A ferry has run between Southampton and Hythe since the Middle Ages and is marked on a map dated 1575.