Sony Award-winning Gaydar Radio has stopped broadcasting after 11 years.
The station, which had 750,000 listeners per month, was launched in 2001 as a service aimed at the gay community.
Owner QSoft Consulting blamed the cost of investing in digital audio broadcasting (DAB) for its closure.
Its two radio licences have been transferred to another station for lesbian, gay, bisexual and transgender (LGBT) people, Manchester-based Gaydio.
QSoft's chief executive officer, Trevor Martin, said the "challenges" of the DAB sector "were increasingly holding QSoft back from investing in its core" business. The company will now focus on its other business interests.
Mr Martin said everyone associated with Gaydar Radio should be "immensely proud" of its achievements.
"The station has devoted an extraordinary amount of time to help social causes within the LGBT community as well as supporting talent within the music industry," he said.
"The transfer of the DAB licences to Gaydio will ensure that the time and money invested in Gaydar Radio will continue to live on."
Gaydio, which is said to attract 100,000 listeners per month, began broadcasting part-time in 2006 and was the first gay radio station on FM in the UK, when it won its full time licence in 2008.
Taking into account its inherited audience, Gaydio will become the largest radio station in the UK for the LGBT community.
"Taking over these licences is a terrific opportunity for us. Gaydar had a large and loyal audience and we're working hard to deliver a service that people will love," Toby Whitehouse, programme director of Gaydio, said.
He added: "Gaydio and Gaydar Radio have shared many similarities in terms of the programming mix and our dedication to promoting LGBT causes. We are really excited to be the forging the biggest LGBT media outlet in the UK."