Malaysia will stage its final Formula One Grand Prix in October after the government and the sport's commercial rights holders announced on Friday, April 7 that their hosting agreement would end a year early, Reuters reports.

The Southeast Asian country has hosted a round of the world championships at the Sepang International Circuit (SIC) since 1999 but the government said last November that the deal would not be renewed when it expired at the end of 2018.

On Friday, however, both parties announced that the October 1 race this year would be the last.

"It's always sad to say goodbye to a member of the Formula 1 family," Formula One commercial operations managing director Sean Bratches said in a statement.

"Over nearly two decades, the Malaysian Formula 1 fans have proven themselves to be some of the sport's most passionate supporters."

Malaysia's Prime Minister Najib Razak said on Friday that declining ticket sales, viewership and tourism were behind the decision to pull out of hosting the race.

"The Cabinet has agreed to end the contract for hosting the Formula One race... after considering lowering returns to the country compared to the cost of hosting the championships," he said in a statement.

State oil and gas firm Petronas is the title sponsor of the F1 race. The company has been hit hard in recent times by tumbling oil prices.

Petronas, however, would continue to sponsor the Mercedes Formula One team as part of its marketing strategy.