In the first half of the year the Australian business had represented approximately 3% of Deliveroo's total gross transaction value (GTV), it said.
"This was a difficult decision and not one we have taken lightly," chief operating officer Eric French said in a statement.
"Our focus is now on making sure our employees, riders and partners are supported throughout this process.”
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French said the company had determined that it could not reach a sustainable and profitable scale in Australia without considerable financial investment.
Local subsidiary Deliveroo Australia Pty Limited had been placed into voluntary administration and would permanently cease trading imminently, the company said in the statement.
London-listed Deliveroo warned last month that sales growth would be at the lower end of its previous guidance, because rising prices were deterring people from ordering takeaways.
The meals ordering and delivery company also said it would halt operations in the Netherlands as of 30 November with more than 9,000 of its riders in the country receiving a compensation package.