The subsidised buses service linking the train station with the shops in the city centre will stop on 21 November after 15 years.
The City Rail Link was operated through a partnership involving Cheshire West & Chester Council, Arriva Trains Wales, Merseyrail, Northern Rail and Virgin Trains.
The council said in a statement on Friday the free service is "not being withdrawn by the five partners however the law prevents a subsidised service to be provided where a similar commercial service operates."
The service will be replaced by a commercial service operated by Aintree Coachline charging £1 each way for adults.
Cheshire West & Chester Council will now pay considerably more than the original partnership contribution – up from £38,000 to an estimated £100,000 a year – because it will fund older people and people with disabilities who live in the borough and are entitled to concessionary fares.
Around 450,000 people currently use the bus service a year and under the new arrangements the service will continue to operate to its original timetable, running every six minutes, Monday to Saturday. On the new service up to two children will be able to travel free if travelling with an adult, otherwise the fare will be 65p. Free or reduced fare travel will be available for those customers who are eligible and have valid concessionary travel.