The side based in Carson, California were entered into North America's top football league in 2004 and established as a sister club to Mexican giants Chivas of Guadalajara.
Initial success saw the likes of USA internationals Brad Guzan, Sacha Kljestan and Jonathan Bornstein help Chivas to four successive play-off finishes in their first five years of existence.
However, recent years have been tough and Chivas have finished bottom of the Western Conference in each of the past four seasons.
MLS commissioner Don Garber revealed in a letter on Monday his plans to revive a competitive edge to football in Los Angeles, where the LA Galaxy currently dominate, with the city to gain a new franchise in time for the 2017 campaign - reportedly to be part-funded by Cardiff City owner Vincent Tan.
He wrote: "After conducting a comprehensive strategic review of the market and Chivas USA's operations, we will announce that effective this afternoon, Chivas USA will cease operations.
"This was a very difficult decision. We want to thank you, the fans, for 10 years of unconditional support.
"We are grateful for your commitment to the club and to the sport.
"I believe strongly that a new MLS Los Angeles team with passionate local ownership and an inclusive approach targeting all soccer/sports fans will be very successful.
"I believe that our new strategy for Los Angeles provides the best opportunity for success and is the best way to connect with an engaged and impassioned fan base in Southern California.
"I am confident that this new direction will help us achieve our goal of becoming one of the top leagues in the world."
Chivas president Nelson C. Rodriguez also released a statement, hailing the team's supporters and outlining the "honour" he felt at the helm.
He posted: "As like any team in any sport, we have suffered unimaginable heartache as well as enjoyed moments of unbridled joy.
"We have felt the pain of the cruel ricochet, the unlucky bounce and the wrong clang off the post. However, we have also been blessed to witness Cubo's golazos, the grace of a Claudio Suarez tackle and the superhero saves of Brad Guzan and Dan Kennedy.
"History will say many things about Chivas USA, but the one, undeniable truth will be that in every instance – no matter the circumstance, setting or outcome – our resiliency was supported by the indomitable spirit of our most loyal and proud fans.
"It has been my honour to be associated with you and Chivas USA. Thank you."
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