Canberra's presence in the North East Australian Football League is diminishing further, with the Queanbeyan Tigers and Belconnen Magpies exiting at the end of this year.
The Tigers baulked at a proposal from the AFL for the four ACT-based NEAFL clubs to contribute $150,000 each to a proposed single Canberra team.
Financial powerhouses Ainslie and Eastlake will remain in a streamlined NEAFL next year while the Tigers and Magpies will revert to the AFL Canberra first division.
The Tigers, Magpies and Sydney Hills Eagles agreed to leave the NEAFL with two years remaining on their licences.
Queanbeyan and Belconnen informed their players before their respective training sessions on Tuesday night.
Queanbeyan board member Mark Armstrong described it as an ''awful time for us'' after the Tigers won the NEAFL Eastern Conference in 2012.
''This was a very tough decision to make, but for our club to remain viable we had no choice but to withdraw from the NEAFL,'' Armstrong said.
''We wanted to have the one-team model, but we couldn't afford the $150,000 the AFL wanted from each of the clubs.
''There's been a downward [trend] in poker-machine trade so the grant from our leagues club will go down.
''The option of revamping the AFL Canberra competition was the best available to us.''
The NEAFL was established in 2011 as an elite second-tier competition for reserves sides from the AFL clubs in NSW and Queensland - the Sydney Swans, GWS Giants, Brisbane Lions and Gold Coast Suns - along with teams from the ACT, NSW, Queensland and NT.
The five teams in AFL Canberra first division at the time - Ainslie, Eastlake, Belconnen, Queanbeyan and Tuggeranong - were admitted to the NEAFL.
The Tuggeranong Hawks pulled out last year, citing financial reasons and an inability to field a competitive team.
Queanbeyan and Belconnen initially supported the AFL's idea for a single Canberra team, however, Ainslie and Eastlake decided to go it alone.
Armstrong expected the club would lose players to Ainslie and Eastlake or interstate clubs as they looked for a pathway to the AFL.
''We know that's going to happen and we know there are players that aren't going to understand our decision,'' Armstrong said.
''It's a decision the board and the management have made in the best interests of the club.''
AFL national second-tier manager Simon Laughton said the priority for the league was to maintain the standard.
''When we restructured the NEAFL competition in 2013 we wanted to ensure clubs would continue to reach high standards of performance both on and off field,'' Laughton said.
''We are committed to this process, and will support clubs to strive to achieve the high standards befitting an elite second-tier competition.''
AFL NSW/ACT general manager Craig Bolton said clubs would be supported through their transition period back to community football.
''These three clubs have made a tremendous contribution to the NEAFL competition, and we would like to thank them for their efforts,'' Bolton said.
''Each of the clubs remains an important part of the community football landscape, and we will assist them wherever possible with this transition process.''