The shutdown of Free Radical has been confirmed by the studio's administrators.
A report in This is Nottingham confirms that yesterday staff arrived at the studio to find the building locked.
185 developers are now facing uncertainty following the studio's closure, thought to have been sparked by poor performance of its Ubisoft title Haze and cancellation of a project with LucasArts.
Cameron Gunn, of Resolve Partners, the administrators that have been called in to deal with the firm, told the paper: "The company was placed in to administration yesterday afternoon.
"We will be spending the next three or four days assessing the financial position of the company but it's business as usual, although we have asked that almost all of the employees apart from a skeleton crew remain at home."
"All employees have been paid up until the end of December and we hope to make another announcement before Christmas or very soon thereafter, but we must stress at this stage that it's business as usual."