The Wales Sevens men's team has been suspended for the "foreseeable future" because of Covid-19's impact.
Welsh Rugby Union (WRU) performance director Ryan Jones does not "view this announcement as the end of rugby sevens for the WRU in the long term".
The ex-Wales captain also confirmed the WRU is looking into Wales' involvement in a GB team in the build-up to the rescheduled Tokyo Olympics.
The Games are being held in 2021 after being postponed from this summer.
A WRU statement read: "The global nature of the pandemic and its financial implications - including the disruption of the World Rugby Sevens Series - has rendered the programme unsustainable in the current climate."
Jones added: "It's an extremely regrettable situation we find ourselves in, and one that is being felt across the world inside and outside sport.
"I've seen first-hand how much the sevens players and staff have put their heart and soul into the programme, which has made reaching this outcome all the more difficult.
"Unfortunately, while we have seen the return of regional rugby in its current restricted form, it's unlikely the sevens programme would be preparing for any top-level competition until at least April of next year.
"The realities of a reduced funding situation have made this impossible for us to sustain."
Wales' men were placed last when the 2019-20 season came to an abrupt end in March.
Jones added: "We are committed to competing in world-class competition and continuing player development is an absolute priority for the WRU, so we will be fully supporting our athletes with their Olympic aspirations.
"Having no sevens programme would be a loss to the national game, and as such I don't view this announcement as the end of rugby sevens for the Welsh Rugby Union in the long term."
Wales' most successful Sevens moment came when they won the World Cup in Dubai in 2009.
Scarlets flanker James Davies and Ospreys back-rower Sam Cross won Olympic silver medals in Rio for Team GB in 2016.
Wales internationals Justin Tipuric, Aaron Shingler, Rhys Webb, Alex Cuthbert, James Hook, Luke Morgan and Cory Allen have come through the sevens programme.