The Sunwolves will not compete in the proposed Australian domestic competition due to logistics and stringent coronavirus border restrictions, meaning the Japanese franchise's time in Super Rugby is over.
Rugby Australia and the Sunwolves decided Monday the Tokyo-based team will not take part from next month in the five-team modified Super Rugby competition.
Even if the Sunwolves were able to enter Australia, they would be required to complete a 14-day quarantine period and find a permanent base for the 12-week competition.
"It is extremely unfortunate and disappointing but the reality is that the Sunwolves' time in Super Rugby has come to an end for now," team CEO Yuji Watase said in a statement.
"It has been an honor and privilege for us to be part of the toughest rugby competition in the world. We wish to thank all our wonderful fans, sponsors, partners, players and staff for all they have done for rugby in Japan and the Sunwolves organization."
Super Rugby chiefs announced in March the Japanese team would be cut at the end of the 2020 competition after five seasons in the Super Rugby fold. Super Rugby's governing body SANZAAR has not officially abandoned the 2020 season, but Japan Rugby Football Union Chairman Shigetaka Moris said the Sunwolves would not be playing again this year.
"The Sunwolves, loved by many fans, have reached the end of the 2020 season," Mori said in a statement, thanking the fans, players and staff for their dedication.
"The five-year trajectory of Sunwolves will never disappear.
"When the Japan national team's success in the Rugby World Cup last year was talked about, it proved to many fans that the existence of the Sunwolves was a key factor behind this.
"Going forward, we will continue to make use of the experience gained by the existence of the Sunwolves to work with fans and other stakeholders to further develop Japan Rugby."
The decision ends a nearly five-year run in Super Rugby for the Sunwolves, who won only nine games in that time and were on the receiving end of some lopsided results.
The Sunwolves' exit comes despite the success of last year's Rugby World Cup in Japan and the lure of Japan's well-heeled Top League, which has attracted a series of marquee players from overseas.
Rugby Australia's interim chief executive, Rob Clarke, said officials had been trying to work through "significant challenges" to field a Sunwolves team in Australia.
"However, the reality is, given the timeframe available, the team's preparation for the competition would be severely compromised," he said in a statement.
"All parties agree that despite our collective efforts and desire to see the Sunwolves take part in the competition, under the current circumstances their participation will not be feasible."