Published Thursday, 04 November 2010
The Secretary of State made the announcement after the Independent Monitoring Commission published its 25th report into paramilitary activity.
Owen Paterson said the decision had been taken due to the progress made in the peace process over the past six years.
"The IMC have played a crucial part in supporting and enabling the historic changes that we have seen in Northern Ireland over nearly 20 years," Mr Paterson said.
"Although there remain those who have rejected peace and politics and who actively work to undermine it, Northern Ireland has made the transition to stable, local democracy and the job of the IMC is nearing completion.
"The British and Irish Governments have, therefore, asked the IMC to prepare one more final report on their work, including lessons learned. After that, we will bring the IMC arrangements to an end."
In paying tribute to the Commission's work, Irish Justice Minister Dermot Ahern warned dissident republicans they will not be allowed to undermine peace.
"We have all had our fill of violence on this island. They need to learn that bravery is not pointing a gun at your neighbour, or planting a bomb in the middle of a busy town and running away - it is working with those around you to create a better future for all," he said.
"Even as these individuals seek to drag us back into the past, we can see the benefits that peace has brought and continues to bring to Ireland.
"The Government's message to those who choose to cling to their weapons is clear - we will not be turned back from the progress that has been made, and the Garda Síochána will continue to work hand-in-hand with the PSNI to stop you undermining that peace."
Describing the monitoring body as an "unnecessary safety blanket for Unionism", Sinn Féin's John O'Dowd said that the IMC "should never have been formed in the first place" and that such a move was long overdue.
"We can only speculate on the amount of public money wasted in the vast expenses claims racked up by the handpicked mandarins who operated the IMC," he added.
TUV leader Jim Allister branded the move a "retrograde step", despite being highly critical of the IMC's work.
"Time and again, the IMC failed to highlight the involvement of so-called mainstream Republicans in terrorism and allowed itself to become little more than a tool of the appeasement process," he said.
"That said, the retention of the IMC did at least suggest that the government was interested in what terrorists were up to."
The Independent Monitoring Commission was set up by the British and Irish Governments in January 2004, to work towards a stable and inclusive devolved government in Northern Ireland.
Its final report, which will contain a review of its six-year term, will be published next spring.