James Murdoch has announced that this Sunday's edition of the News of the World will be the paper's last.
It was reported to Yahoo! News by a News of the World journalist that James Murdoch broke the news to staff this afternoon and that many journalists are said to be distraught and phoning their families.
In a statement James Murdoch said: "Having consulted senior colleagues, I have decided that we must take further decisive action with respect to the paper. This Sunday will be the last issue of the News of the World.
"We will run no commercial advertisements this weekend. Any advertising space in this last edition will be donated to causes and charities that wish to expose their good works to our millions of readers."
Orlando Parfitt, a former News of the World journalist told Yahoo! News: "I have very mixed emotions. On one hand, I am gutted. I have many friends at the paper - ex-colleagues who had nothing to do with the phone hacking scandal - who have just found out they will lose their jobs.
"I still believe the paper was home to some of the most talented journalists in the industry and I used to be extremely proud to say I had worked there. However, the latest batch of allegations was sickening and permanently tarnished the name of the paper."
Ed Miliband, leader of the Labour party, remains adamant that News International Chief Executive Rebekah Brooks should lose her job. "Closing down the News of the World does not solve the problem" he told BBC News.
"The fact that she [Brooks] is leading or overseeing the investigation with police beggars belief."
Rupert Murdoch is refusing to comment at this stage as police investigations are still ongoing.
The BBC has reported that the URLs TheSunOnSunday.co.uk and TheSunOnSunday.com were registered two days ago by an unknown company.
Twitter has become frenzied with people commenting on the newspaper's closure. Former NOTW editor Piers Morgan tweeted: "Shocked and saddened by closure of the News of the World. Scandals of past week indefensible, but has been a great British newspaper."