Collingwood has told Super Netball bosses it will withdraw its licence from the competition at the end of the 2023 season.
The club said it made the decision "following a review focusing on the viability of the club's netball program into the future".
"Collingwood is a better place for having had a netball team," Collingwood chief executive Craig Kelly said in a statement on Thursday.
"The decision to not renew our netball licence has been an incredibly difficult one which has weighed heavily on us."
Super Netball chief executive Kelly Ryan said she was "disappointed" by the decision.
"In recent times it had become clear that Collingwood's priorities had shifted away from netball to focus on its core business of football," Ryan said.
"We are understanding of the impact Collingwood's decision has on its current players and staff and we will support them during this time."
Collingwood first broke the news that it was contemplating the club's future in the league last week, after which Super Netball said it was committed to running an eight-team competition next year regardless of the Magpies decision.
Ryan said Super Netball is currently talking to interested parties in the running to replace the Magpies as the league's eighth club.
"The growth of netball in Australia is strong, with more than 1 million participants across the country," Ryan said.
"We are proud of the Super Netball competition and it remains the number one professional netball league in the world."
Players feel like 'collateral damage' in Netball Australia issues
Collingwood's players released a joint statement on Thursday evening expressing their surprise and disappointment at the decision, and pointed the finger at Netball Australia.
"As a playing group the decision has been overwhelming. The impact on each athlete has been significant and the prospect of playing out the remaining games, right now, seems inconceivable," the statement read.
"We acknowledge the club has been transparent with the commercial realities that led to this decision. We acknowledge the club has also accepted the program could have been better. We appreciate and respect their candidness.
"As athletes we consider ourselves part of the netball program and acknowledge we also had a role to play in the program's viability. Success on court translates to commercial gain.
"However, we feel compelled to highlight the role (or lack thereof) Netball Australia played in today's decision.
"We feel like collateral damage in a much larger issue for Netball Australia. There is untenable dysfunction and disharmony between administration and the playing group. There is also no confidence in the strategic direction of Netball Australia.
"As a playing group we care deeply about sport at every level. From grassroots to the elite level, we want to see as many people playing, watching and being connected to netball as possible. We want to leave the sport in a better position than we found it. We want the best netball and opportunities within netball for generations to come.
"We call on greater governance, transparency, and leadership from Netball Australia."
The Magpies have played in Super Netball for seven years, with limited on-court success — this season the club has won just two of its 10 games.
The club has also struggled to attract supporters to games and faces financial worries as a result.
"As a club, we are tasked with continuing to deliver growth across all areas of Collingwood and ultimately, the review, which analysed key aspects of the club's netball program and that of the governing body, determined that the program is not sustainable," Kelly said.
He said the club has been in contact with Netball Australia and Super Netball bosses to explore solutions, but Netball Australia's own financial challenges played "a key role" in the club's decision.
"We acknowledge we could have run a better netball program at Collingwood," Kelly said.
"While the timing of an announcement like this is never ideal, or pleasant, it is important to provide our athletes, coaches and staff with clarity so they can plan for the future.
"We will support athletes and staff on their transition over the coming months."
Kelly paid tribute to coach Nicole Richardson and captains Geva Mentor and Ash Brazill, along with all the players who have played for the club, saying each "made our club better".
The club said its commitment to women's sport remained solid.
"To be clear, while we are exiting netball, Collingwood remains absolutely committed to growing, investing in and developing women athletes through our AFLW and VFLW programs.
"We thank every single member and supporter of the Magpies' netball community for their unwavering support and loyalty and we thank all corporate partners, past and present, for their support over the course of the journey."
