NuGen was behind the development of the Moorside nuclear power station project in Cumbria, in north-west England.
Toshiba’s move will put a dent in the UK’s plans to develop new nuclear power stations as it continues efforts to move to a low carbon economy.
The Japanese firm said in a statement that it would start the wind-up process in January 2019.
“After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen,” the Toshiba statement said.
Korea Electric Power Corporation (Kepco) had been a preferred bidder to take over the nuclear power plant project – but those talks fell through after more than a year of negotiations.
Toshiba said it expected to record a consolidated loss before taxes of about 15bn Japanese yen ($131.8m; £100.5m) over the move.
GMB, a UK trade union with more than 631,000 members, said the “looming collapse” of Moorside had been “depressingly predictable”.
In September NuGen announced it was reducing its team at the Moorside plant from more than 100 to fewer than 40 – leading to speculation the plant’s development was in jeopardy.
NuGen was initially co-owned by Toshiba and the French firm Engie. Toshiba was subsequently forced to buy the remaining 40% of NuGen it did not already own via a bankruptcy condition related to Engie.