The club explored the possibility of external investment into their women’s team, which may have allowed the first team to maintain their Championship status.
However, Reading said: “The complexities around separate ownership have meant operating Reading FC Women under a separate funding model has not been possible.”
Reading were relegated from the Women’s Super League in 2023, and finished 10th out of 12 in the Championship last season.
Dawn Airey, Women’s Super League and Championship board chair, said: “We are very disappointed that Reading FC Women have decided to withdraw from the Barclays Women’s Championship.
“We have been working closely with the club throughout the season and have made every effort to find a solution and to prevent this outcome.”
Sell Before We Dai, a Reading supporters’ group, launched a protest against the club’s owners earlier this week ahead of their decision.
As well as highlighting the plight of the women’s set-up, the group also urged any potential buyers to accelerate their interest in the Royals.
Reading’s demotion means the Championship will have just 11 teams next season, with one relegation place.
