The Cisalpino rail service, a Swiss-Italian joint venture, will cease operations on 13 December 2009, following years of problems with quality and reliability.
The subsidiary of Swiss Federal Railways and Trenitalia, Italy's government-owned rail service, was founded in 1993.
The rail service was notified by the Federal Transportation Office in September that it would cut the service if quality did not improve.
Improvements to the rolling stock and measures to improve punctuality had been discussed by the companies in recent months, and they have now decided to provide services between Switzerland and Italy separately.
Trenitalia will receive five of the Cisalpino's nine train sets, with the remaining four going to the Swiss. The change will affect approximately 40 employees of the rail service.