Basque rebels Eta will end their ceasefire as of tomorrow, the group said in a statement published in the Basque newspaper Berriatoday.
"The minimum conditions for continuing a process of negotiations do not exist," said Eta, which wants independence from Spain.
It added that the government of Prime Minister Jose Luis Rodriguez Zapatero responded to its ceasefire "with arrests, torture and persecution".
Eta declared a ceasefire in March 2006 and had insisted that it still held despite killing two people with a bomb in Madrid airport late in December.
But the latest announcement, which has been widely anticipated by security services, could mean another big attack is imminent, Spanish media has reported.
Spain's Socialist government started exploratory peace talks in mid-2006 but broke them off at the end of the year after the airport bomb.
Eta has killed more than 800 people in four decades of armed struggle for independence of the Basque country, despite the fact that the region already enjoys considerable autonomy within Spain.
The government says it will only negotiate with Eta if it ends all violence.