US airline United is to stop flights between Belfast and New York, months after a £9m rescue deal.
Two thirds of the money, which was to be given to United over three years, was to come from the Northern Ireland Executive.
The flight is the only direct air link between Northern Ireland and the US.
The European Commission has said EU rules do not allow public authorities to grant a specific airline an "undue advantage".
Reaction to loss of New York flights
The financial assistance was revealed in August. However, it is understood only part of the £9m aid was ever paid to United and it has now been refunded.
On Friday, United said the last departure from Belfast will be on 9 January.
United said it had taken the decision because of the route's poor financial performance.
"We will contact customers with bookings for flights beyond those dates to provide refunds and re-accommodate where possible. We apologise for any inconvenience caused," it added.
United's decision to axe its service between Belfast and New York is a setback for the airport and the Northern Ireland Executive.
But before now each had been mindful Europe could scupper a hastily arranged £9m rescue deal.
However, the gamble was considered worth taking, as without it United would have pulled out earlier.
Only part of the aid money has been paid and it has now been refunded.
Northern Ireland has long struggled to attract airlines on long-haul routes, while Dublin Airport rapidly expands its destination choices.
United's decision will not make the job any easier and, at the very least, is an undoubted knock to the prestige of Northern Ireland Plc.
Belfast International Airport said the flight is going because the European Commission blocked the funding package on state aid grounds.
The airport's managing director Graham Keddie tweeted that he was "absolutely spitting" about the decision which he blamed on "useless, faceless EU bureaucrats".
He said the decision would be a "body blow" to Northern Ireland executive ministers "who use it to promote Northern Ireland to would-be investors from the United States".
"To block a support package for an airline that delivers direct access to the United States is almost beyond comprehension," Mr Keddie said.
"The EU decision-making process is abysmal, biased and unfair and has resulted in the loss of this service."
In a statement, the European Commission said EU state aid rules did not allow public authorities to "grant a specific airline an undue advantage to the detriment of competing airlines and distorting competition in the single market".
It added that the arrangement between United and the Stormont executive had been put in place "without prior notification" to the commission. The commission then received a complaint about the deal, which led to the ruling.
Economy Minister Simon Hamilton said he was "baffled" by the EU ruling, and insisted that the executive did the right thing by trying to save the route.
"There was a risk to the flight and we stepped in to save it," Mr Hamilton said.
"Faced with the same circumstances again, I would make the same decisions. All public money has been recouped with interest and we retained the route for a longer period."
He said it was "deeply regrettable that unelected bureaucrats in Brussels have effectively scuppered this important flight for Northern Ireland".
He added that he would establish an air routes task force and said: "I have already been in discussions about bringing new airlines to Northern Ireland."
In September, MLAs on the Public Accounts Committee (PAC) were told the deal got rushed executive approval in the face of concern about value for money.
The NI Auditor General said Economy Minister Simon Hamilton issued a ministerial direction for the bail-out, which was endorsed by First Minister Arlene Foster and Deputy First Minister Martin McGuinness, "under emergency procedure".
United airline stop flights between Belfast and New York