United says the service between Birmingham and New York's Newark airport will be discontinued from October 5.
The airline has run the route for more than 20 years, carrying more than two million passengers, but it claims it is shutting the route because of its 'poor financial performance'.
It is a major blow for Birmingham Airport and its growth plans, coming after rival US carrier American Airlines pulled its direct flights to New York JFK in January after operatingh it for just eight monthsn.
In a statement, United Airlines said: "We have regretfully taken this decision because of the route’s poor financial performance. We will contact customers with bookings for flights beyond those dates to provide refunds and re-accommodate where possible. We apologize for any inconvenience caused.
"We appreciate the service of our Birmingham-based employees and our human resources team is organizing individual consultations with each of the three employees to discuss severance payments and opportunities for redeployment, assist with job searches and answer any questions."
It means travellers from the West Midlands now face having to travel to Manchester or Heathrow for direct flights, although other airlines offer onward connections to the USA from Birmingham routes.
An airport spokesperson said: “Birmingham Airport is disappointed by United Airlines’ decision to withdraw its daily Birmingham-New York service from October 5 after 20 years’ service.
"Passengers traveling to North America can continue to fly one-stop with a number of airlines including Icelandair, Lufthansa, KLM and Air France, as well as Aer Lingus via Dublin, which has the added advantage of clearing US customs in Dublin, Ireland.
“We expect to be making an announcement shortly regarding another airline serving North America non-stop from Birmingham, giving passengers additional choice."
Birmingham Airport has only just hailed another month of record breaking growth, after handling more than 1.3 million passengers in June. The big growth, however, has come from short haul flights, with regular flights to Sofia, Lisbon, Rennes, Nantes, Ibiza and Burgas in Bulgaria the most popular destinations.
The ending of the United Airlines service comes just six months after the carrier celebrated its 20th anniversary of flying from Birmingham.
At the time Bob Schumacher, United’s managing director sales for the UK & Ireland, said the airline maintained ‘a watching brief’ on the service to monitor demand, which was spread across both leisure and business travellers. Around 40 per cent flew on from Newark to other US destinations as well as Canada, Central and South America. But most head for New York.
United has been operating non-stop flights from Birmingham Airport since July 15, 1997 to New York/Newark. Popular onward destinations taken by Birmingham Airport passengers in recent years have included Las Vegas, San Francisco and Los Angeles.
The US is one of the top destinations for West Midlands exported goods and John Lamb, from the Birmingham Chambers of Commerce, said: "We regret the loss of this important service at a time when trade with America is becoming even more vital, particularly in the light of Brexit. It seems a pity that we are going to lose this link at a time when our companies are going to want to export more to the US."