The Malaysian Grand Prix will be the country's last after 19 years on the Formula 1 calendar.
The decision, announced by F1 commercial boss Sean Bratches, comes after the country's government questioned the value of the race.
The American said that the F1 calendar would have 21 races in 2018, despite the loss of the south-east Asian event.
The French Grand Prix returns after a 10-year absence and Germany is back on after dropping off in 2017.
Malaysia was in the vanguard of the new races that came to define Bernie Ecclestone's final years in charge of the sport.
A state-of-the-art facility was built and the race funded with government money as the country sought to make a name for itself on the global stage.
Similar events followed the same pattern in Bahrain, China, Abu Dhabi, Russia and Azerbaijan.
Malaysia had struggled in recent years to attract a significant crowd, its appeal damaged by the more glamorous night-time event on a street track in Singapore, which made its debut in 2008.
It was confirmed in November that the race would end after the 2018 staging, but that decision has now been brought forward.
The country's prime minister, Najib Razak, said: "The Cabinet has agreed to end the contract after considering lowering returns to the country compared to the cost of hosting the championships."