Sauber have pulled out of their new engine partnership deal with Honda.
The Swiss team said in a statement on Thursday before this weekend's Hungarian Grand Prix that the deal had been "cancelled".
The move follows the appointment of new team principal Frederic Vasseur, who replaces Monisha Kaltenborn after her departure in June.
Vasseur said the decision was "made for strategic reasons, with the best intent for Sauber's future in mind".
Honda makes the least competitive engine in F1 this year and has struggled with reliability and performance since returning to the sport with McLaren in 2015.
Honda's future with McLaren is also in doubt, with the team considering ending its long-term works partnership at the end of this season.
Mercedes, Ferrari or Renault for Sauber?
McLaren had been hoping for a move to Mercedes customer engines but in recent days it has emerged that Renault is also a serious contender.
If McLaren and Honda split, the Japanese company could potentially stay in F1 with the Toro Rosso team.
Sauber said it would announced a new engine partner "shortly".
Both Mercedes and Ferrari are possibilities.
Sauber is this year running Mercedes young driver Pascal Wehrlein in one of its cars and Vasseur is close friends with Mercedes motorsport boss Toto Wolff.
However, Ferrari could well be the more likely option.
Sauber are already running year-old Ferrari customer engines, and have been in a partnership with the Italian team since 2010.
Insiders say that Ferrari development driver Charles Leclerc, who is dominating the Formula 2 championship this year, is close to doing a deal to race for Sauber in 2018.
Using Ferrari engines could be part of that deal and sources say Vasseur is pushing to make that happen, in partnership with Leclerc's manager Nicolas Todt, who is Vasseur's long-time partner in the ART company that runs teams in junior categories.