The 737 MAX model has been unable to fly since March after the US Federal Aviation Administration began its review into the planes.
However the drastic decision to suspend production of the best-selling jet altogether was approved after the US firm acknowledged the regulator review would likely roll into the following year.
In a statement the aerospace manufacturer said: “Safely returning the 737 MAX to service is our top priority.
“We know that the process of approving the 737 MAX’s return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers, and the flying public have confidence in the 737 MAX updates.
The statement added: “As a result of this ongoing evaluation, we have decided to prioritise the delivery of stored aircraft and temporarily suspend production on the 737 program beginning next month.”
The decision from America’s largest manufacturing exporter risks sending shock waves through the US economy, impacting suppliers and exacerbating the woes of the company.
Shares fell by more than 4% on Monday as speculation over the potential of an announcement from the firm grew.
Lion Air flight 610 crashed into the Java Sea shortly after take-takeoff from Jakarta, Indonesia, in October last year, killing 189.
Then in March, 157 people lost their lives when Ethiopian Airlines flight 302 went down just outside Addis Ababa.
An anti-stall precaution known as the Maneuvering Characteristics Augmentation System (MCAS) was implicated in both incidents.