Italian civil aviation authority ENAC has suspended budget carrier MyAir's operating licence, effective from midnight tomorrow.
The carrier had been operating on a temporary licence for about a month.
Following mounting disruption to MyAir flights, ENAC has decided that the airline could not "ensure coverage of costs for essential services".
MyAir has been seeking recapitalisation for several months, but its failure to land secure investment has been reflected in deteriorating levels of service.
ENAC's final warning, on 21 July, demanded that MyAir "restore the smooth operation of flights" within 24 hours.
Yesterday, however, several Italian airports were still reporting delays and cancellations to MyAir flights.
Summing up its decision for the "emergency" suspension, ENAC says the airline has "not provided concrete evidence" about proposed recapitalisation.
It has concluded that allowing MyAir to continue would only "aggravate" problems for the airline's customers.
MyAir was not available for comment but a statement on its Internet site confirms the ENAC decision, and that the airline is "obliged" to halt services.