Although it also stressed that other future models planned for Nissan Sunderland plant - the next-generation Juke and Qashqai - remain unaffected.
Nissan, which has made cars at Sunderland since 1986, said plummeting diesel auto sales were also a factor in its decision, which was expected to have created an additional 700 jobs at Sunderland.
The gradual tapering of auto tariffs from 10% to zero within seven years would make it easier to produce in Japan and then export to the European Union, said David Bailey, the professor of industrial strategy at Aston business school.
One of these decisions concerned the production of the new X-Trail model - shortly after the letter was sent on 21 October 2016, Nissan announced it would build the SUV at its Sunderland plant.
The EU insists that the current deal "remains the best and only way to ensure an orderly withdrawal", and German Foreign Minister Heiko Maas said on Sunday that "if the British want to avoid a disorderly Brexit, our offer is on the table".More news: Todd Gurley avoids media in Rams’ final open locker room availability
"If you have no trade (deal) with Europe then it might make more sense that you produce them in Japan and ship them from over there".
The British government says that if Nissan wants their financial support, the company will have to reapply based on a new investment strategy.
"The continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future", Nissan's European chairman Gianluca de Ficchy said.
Business Secretary Greg Clark said: "Nissan's announcement is a blow to the sector and the region, as this was to be a further significant expansion of the site and the workforce".
"It will be a critical priority of our negotiation to support United Kingdom vehicle manufacturers and ensure that their ability to export to and from the European Union is not adversely affected by the U.K.'s future relationship with the European Union", he said.More news: Oil falls on U.S
The Nissan factory builds around 30% of the UK's 1.52 million cars, making it the largest vehicle factory in the country.
"In any circumstance, the government will ensure that the United Kingdom continues to be one of the most competitive locations for automotive and other advanced manufacturing within Europe and globally, including sites such as Sunderland".
Investment for emissions regulations, reduced sales forecasts and Brexit uncertainty were cited as reasons for the decision.
"They also pointed out what they've said consistently since 2016, that a risk of a no-deal Brexit is a source of damaging uncertainty".More news: Meghan Markle 'wrote letter to dad after Royal Wedding'