The company has opted to dedicate the funds allocated to the 30,000sq ft space, which once housed a train depot, towards less profitable parts of the business.
The decision comes as GMG's annual operating losses are expected to total £58.6m by the end of the month, and the company is looking to cut £54m from its running costs.
The event space forms part of the Guardian and Observer publisher's wider plans break even within three years. It is also set to cut 250 jobs, 100 of which are expected to be in editorial.
Employees were informed of the GMG's decision via an email from editor-in-chief Katharine Viner and chief executive David Pemsel last week.
It was , however King’s Cross Central Limited Partnership (KCCLP) remained positive that the project would resume.
KCCLP has yet to respond to Event's call for comment on GMG’s move at the time of publication.
The building was to be transformed into 'a new space for debate, culture and curiosity' complete with 12 event spaces, an open amphitheatre, cinema, restaurant, rooftop garden, 3D printing and fabrication lab and galleries.
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