Toshiba also expects to scrap or consolidate some factories and reduce its subsidiaries by 25 percent -- announcing the withdrawal from a US-based liquid natural gas business.
The liquidation of NuGen, a nuclear subsidiary in Britain, could complicate UK efforts to shift away from polluting power plants that rely on coal, a number of which are slated to close.
The NuGen project in Cumbria in northwest England was to comprise three reactors and was due to start producing energy from 2025.
Toshiba CEO Nobuaki Kurumatani told reporters in Tokyo the decision was reached after "sincere discussions" with the British government.
A spokesman for Britain's business ministry said Toshiba's decision would not sidetrack the government's decision to push ahead with nuclear expansion, including at another plant at Hinkley Point.