Clee Hill-based R&B Travel has surrendered its licence to the Traffic Commissioner after its directors faced a public inquiry over repeated failings.
The public inquiry, scheduled for October 21, was cancelled at the request of the company which decided to voluntarily give up its licence rather than face disciplinary action.
It means the 292 service between Ludlow and Kidderminster will be cancelled from January 6, leaving rural communities like Clee, Cleobury Mortimer and Hopton Wafers with no public transport.
Worcestershire County Council, which manages the service with support from Shropshire Council, is in the process of finding a new operator to take over the service to avoid leaving people stranded.
The 291 between Kidderminster and Tenbury Wells will also come to an end, but will be taken over by a different operator.
Damien Currie, communications manager for the Traffic Commissioner's Office, said: "I can confirm that the public service vehicle operator’s licence held by Alan Thomas Radnor and Lorraine Elizabeth Radnor, trading as R&B Travel, will be revoked on the grounds of a lack of financial standing.
"The order, by the Traffic Commissioner for the West Midlands, Nick Denton, takes effect on 6 January 2020.
"It follows the operator’s request for the licence to be terminated and for the planned public inquiry into the licence to be cancelled. The traffic commissioner agreed to this request.
"Prior to the revocation order coming into effect, the business will be limited to running seven vehicles. It was originally authorised to use nine vehicles.
"Mr Denton also accepted a commitment from the firm’s transport manager, Nicola Wilkins, that she would not look to act in that role in the future without asking for permission from the relevant traffic commissioner."
R&B launched the service in April 2018 but faced repeated criticism over delays and vehicle maintenance.
Councillor Andy Boddington, who represents Ludlow North on Shropshire Council and is a frequent bus user, said in October drivers were not given enough time to complete the journey to schedule and have breaks, leading them to drive like 'boy racers'.
The company responded to the comments, saying: "Drivers get their scheduled breaks during the day, they are fully qualified professional drivers and not 'boy racers'."
But the Traffic Commissioner confirmed R&B was referred by the Driver and Vehicle Standards Agency (DVSA) over drivers' working hours, among other issues.
Mr Currie said: "Two unsatisfactory investigations raised issues with vehicle maintenance standards and non-compliance with the drivers’ hours and tachograph rules."
Councillor Boddington and Councillor Richard Huffer, who represents Clee, have raised concerns that people will be left isolated if a new operator cannot be found to run the 292.
R&B Travel has been asked to comment.