Kay, 43, dropped the bombshell news during an interview on Radio Manchester, where he also revealed that he has no plans for a Christmas special.
Asked whether his character John Redmond would ever switch from Forever FM to Radio Manchester, Kay replied: “There's not going to be a series three so it won't ever happen.
“You've got to get out while the going's good. No Christmas special, no.”
Series two of the BBC comedy concludes tonight, and fans who haven't already watched the episode on BBC iPlayer, will be waiting to find out if John finally gets together with his passenger Kayleigh Kitson (Sian Gibson).
Kay said he will miss working with Kitson, but said he doesn't want to continue and then ruin the show.
“I am absolutely delighted and overwhelmed by everybody's support and the fact that everyone's loved it so much has been wonderful for everyone who's made it, but you're better quitting while you're ahead,” he said.
“There's only so much you can do in a car and the last thing you want to do is ruin it because I think it's a lovely thing.
“It's been wonderful working with Sian, who's one of my closest friends in the world. We have a good laugh but I think sometimes you've got to just leave things.”
Fans of the show were left “gutted”, with some calling for a petition to be set up.
someone please start a petition for more #carshare please,please— James A Wright (@ScarletzCaptain) May 2, 2017
Car Share follows supermarket assistant Redmond and promotions rep Kitson as they particpiate in a car share scheme.
The show picked up Best Comedy at the 2016 National Television Awards, and the BAFTA TV Awards for Best Male Comedy Performance and Best Scripted Comedy at the 2016 BAFTA TV Awards.
But disappointed fans will be pleased to know that Kay is thinking of ways to revive Channel 4 comedy Phoenix Nights.
“I love Phoenix Nights, and I would love to go back,” he said. “I’ve got a lot of ideas about Phoenix Nights – in fact there’s a whole series three that’s been written for about 15 years!”
Car Share is on BBC One, tonight at 9pm.