The Melbourne-based club, who won the league title for the first time in 2022, will not field teams in either the men's or women's leagues in the upcoming campaign due to financial difficulties that saw the club's playing licence revoked last month.
An appeal against that decision, which was made after the club struggled to pay players and the Australian tax authorities, is expected to be heard this week.
"Western United acknowledges today's update from the Australian Professional Leagues (APL) confirming that the club's participation agreement will be placed into hibernation for the 2025/26 A-Leagues season," the statement said.
"This decision, made in close consultation with the APL, is a strategic step that will allow us to reset and position Western United for a stronger future in Australian football.
"To our A-Leagues players, coaches and staff, we say simply and sincerely: we are sorry. The uncertainty you have faced is not what you deserved. We acknowledge this has been an incredibly difficult period."
The move means the new season of the men's league will start on October 17th with 12 teams, while the women's competition will feature 11 clubs.
The decision allows players from both teams to find alternative employers before the registration period for the new campaign closes.
While the senior teams will be placed on a pause for the upcoming season, the academy will continue to operate, and Western United stressed the club would return to the A-League in 12 months' time.
"Let us be absolutely clear: this is not a farewell, nor is it a step back," said the club.
"This is an investment in our future, a proactive move that will empower us to reset and come back revitalised.
"The story of Western United is still being written. The green and black have already made their mark on Australian football, and together with our people and our community, the best chapters are still to come."