Condor Ferries has confirmed that it is pulling out of Weymouth next spring because the resort cannot accommodate its big new £50 million super-ferry, the Austal 102.
The new Channel Islands vessel will operate from Poole.
Condor Chief Executive Officer James Fulford said the company was aware of the impact this would have on business in Weymouth.
He said: : "Poole is a modern and well-connected port, well-liked by our customers. We recognise that this is disappointing news for Weymouth. However, given the need for berth improvements and an Environmental Impact Assessment, Weymouth is not currently in a position to accommodate the 102.
"Reaching a medium-term arrangement with Poole will give certainty to our customers, our Islands, and Poole Harbour Commissioners, whilst also allowing enough time for Weymouth & Portland Borough Council to establish their long term plans for their port.
"We will continue to operate Condor Vitesse from Weymouth until spring 2015, when we introduce the 102. The Austal 102 will enable us to improve reliability, increase capacity, and give our guests a much greater level of comfort.
"We plan to introduce the 102 in spring 2015 and, in the months ahead, we will be sharing more details about this superb new ship and announcing ways in which Islanders can be involved in our preparations."
Condor has also confirmed it has agreed with Poole Harbour Commissioners that the 102 will be based in Poole from spring 2015. The ferry service was temporarily transferred to Poole in February 2012 after part of the ferry berth collapsed.
Weymouth & Portland Borough Council, which owns and runs Weymouth Harbour, carried out major repairs costing around £3.92 million and sailings from Weymouth resume in July last year.
Condor Ferries was founded in 1964 and initially operated a passenger service between France and the Channel Islands.
In 1987 the first service linking the Channel Islands with the UK was launched and since then Condor Ferries has operated a year-round service connecting the UK through Poole, Weymouth and Portsmouth to the Channel Islands through Guernsey and Jersey and also the ports of St Malo and Cherbourg in France.