BBC Director of Sport Barbara Slater says cost cutting pressures were behind the decision to end its deal to show Formula 1 coverage on terrestrial television in the UK, following the announcement that Channel 4 will take over from 2016.

After an absence of more than 10 years, the BBC regained the rights to televise F1 exclusively in 2009, only to lose them again to Sky Sports from 2012. Despite this, the BBC continued to televise the championship as part of a unique free-to-air deal alongside Sky, which would allow it to show a selection of races live, as well as extended highlights.

However, though the current deal was due to end in 2018, the BBC has today announced it is ending its contract early, with commercial broadcaster Channel 4 coming in to take over as the free-to-air home of F1 on UK television.

Explaining the reasons for the cancellation, Barbara Slater says dropping F1 will help ease the financial pressures laid out by the Director General.

"The Director General announced recently that the BBC needs to plug a ?150 million annual gap in its finances from next year," she wrote in a blog on the BBC website. "He outlined that two-thirds of the savings would come from 'scope' savings, meaning that the BBC would stop doing some of the things that we currently do.

"BBC Sport was asked to deliver approximately ?35 million of these savings. This was due to the pressing need to realise the savings and the greater flexibility that BBC Sport has to deliver them compared to most other parts of the Corporation.

"No Director of Sport wants to be responsible for reducing the amount of sport on BBC TV. But the current financial position of the BBC means some tough and unwanted choices have to be made. There are no easy solutions; all of the options available would be unpopular with audiences.

"The amendment to the TV rights agreement for the Open Golf (a move from live to extended highlights) and the sharing of the 6 Nations Championship earlier this year contributed to our savings target. These deals also helped to mitigate the super-inflation that is prevalent across the sports rights market.

"And the BBC is announcing today that a significant chunk of BBC Sport's remaining savings target will be delivered through the immediate termination of our TV rights agreement for Formula 1. Any decision to have to stop broadcasting a particular sport or sporting event is hugely disappointing and taken reluctantly."

Meanwhile, the BBC did confirm it has extended its radio rights deal which will see F1 continue to receive live radio coverage until 2021, via its BBC Sport website and news service.

The BBC's TV deal will be taken on by rival broadcaster Channel 4, which will take the unprecedented move to show ten races live without advertising breaks.