The company which became the first private firm to manage an NHS hospital says it wants to “withdraw from its contract”.
Circle Holdings, which operates Hinchingbrooke Hospital in Cambridgeshire, said its franchise is “no longer viable under current terms”.
The move comes amid funding cuts and pressure on the casualty department, Circle said.
The Department of Health said it was “disappointed” in the decision.
Circle took on Hinchingbrooke in early 2012, as it faced closure.
It said there had been unprecedented increases in accident and emergency attendances, a lack of care places for patients awaiting discharge, and that funding had been cut by 10.1% this financial year.
Circle has made payments to the trust totalling about £4.84m and could be required to make a final support payment of approximately £160,000, the firm said.
Under its contract, it has the right to end the franchise if the amount of money it has to put in to the trust goes over £5m.
Chief executive Steve Melton said: “This combination of factors means we have now reluctantly concluded that, in its existing form, Circle’s involvement in Hinchingbrooke is unsustainable.”
Circle chairman Michael Kirkwood said the decision had been made “with regret and after considerable thought”.