After 85 years of operation, national news agency Australian Associated Press (AAP) will close its doors, with about 500 job losses at the newswire service.

Key points: AAP will close its doors after 85 years in operation as major shareholders decide to pull the plug on the newswire service

AAP will close its doors after 85 years in operation as major shareholders decide to pull the plug on the newswire service AAP is owned by Nine, News Corp Australia, The West Australian and Australian Community Media.

AAP is owned by Nine, News Corp Australia, The West Australian and Australian Community Media. Media companies all around the world have faced disruption amid falling revenues

AAP, which is owned by a number of major news outlets, provides a range of services to media companies including newswires, subediting and photography.

AAP is owned by Nine, News Corp Australia, The West Australian and Australian Community Media.

Chief executive Bruce Davidson on Tuesday said the business was no longer viable in the face of increasing free online content.

The service will close on June 26.

AAP's Pagemasters editorial production service will also close at the end of August.

"The shareholders of AAP have decided to close the operation," Mr Davidson said.

"This decision has been made with very heavy hearts. It's been made on an economic and financial basis."

"It certainly has little to do, in some ways, with the quality, the accuracy the speed and heritage of the AAP news operation over many, many years."

AAP CEO Bruce Davidson says shareholders have made the decision to end their use of AAP newswire service with "very heavy hearts". ( Rachel Pupazzoni, ABC News. )

Prime Minister Scott Morrison told Parliament that AAP journalists have a proud and wonderful history covering Australian federal politics.

"When you have such an important [publisher] such as AAP coming to an end … that is a matter of real concern," he said.

Opposition Leader Anthony Albanese also addressed reporters in Parliament, saying "you will leave a massive void in terms of information coverage".

"Democracy should not be taken for granted," he said.

"It relies upon communication of what happens in this place and the Australian public will be less informed as a result of the decision today."

Google, Facebook impact on media

Mr Davidson said media companies all over the world had faced financial disruption, and there would be about 500 people at AAP impacted by the closure. This includes about 180 journalists.

"We've seen a lot of cutbacks, closures, a reduction in news coverage by the traditional media companies across Australia; across the rest of the world," Mr Davidson said.

"Newsagencies have endured [a tough environment] for quite a long time, but we are now in a situation where too many of our customers are not wanting to pay for our content.

"Too many of our customers are relying on what is on Google, what's out there on Facebook in terms of their content generation.

"Our business model is not viable in the future, given the changes in the revenue mix."

But he said AAP shareholders including Nine and News Corp would now likely hire more journalists within their own organisations.

"There will be more jobs for journalists at News [Corp] and Nine, and I'm sure other outlets at well," Mr Davidson said, but added that with AAP's end, there may be fewer journalists working in the Australian media landscape generally.

'A great loss' for journalism

AAP chairman Campbell Reid, also a News Corp executive, described the newswire as Australian "journalism's first responder".

"It is a great loss that professional and researched information provided by AAP is being substituted with the un-researched and often inaccurate information that masquerades as real news on the digital platforms," Mr Reid said.

The MEAA had written to AAP editor-in-chief Tony Gillies seeking urgent clarification of reports of job cuts.

MEAA media director Neill Jones said in a statement on Tuesday that AAP had loyal and hard-working staff.

"Australians rely on the hard work of AAP reporters, photographers and sub-editors whenever they open a newspaper or click on a story on a website," he said.

"Their work may often go unattributed and without a byline, but without it, Australians would be less informed about politics, sport, crime and other news."