The grass-court tournament in Birmingham is being downgraded from next summer, with Wimbledon supporting a new event in Berlin.
The Nature Valley Classic, held two weeks before Wimbledon, is the biggest women-only tournament played in the UK and has attracted the world's top stars since being elevated from International to Premier status on the WTA Tour in 2014.
This year Naomi Osaka, Ashleigh Barty, Karolina Pliskova and Venus Williams all played at Edgbaston Priory but it has continued to be overshadowed by the men's event at Queen's Club, and the huge outlay required in prize money has not been matched by similar increases in ticket sales or sponsorship, meaning the tournament has been operating at a significant loss.
Birmingham will now have to compete with Berlin to try to attract players, while other changes include a new men's event in Majorca and a proposed women's tournament in Bad Homburg, Germany, backed by former Wimbledon champion Angelique Kerber.
The other British tournaments in Nottingham and Eastbourne are unaffected.
Outgoing Wimbledon chairman Philip Brook said: "A strong and successful grass-court season is absolutely critical to the future of grass-court tennis and thus the future success of the Championships.
"Having worked to expand the grass-court season to be a meaningful gap between Roland Garros and Wimbledon, we are pleased to be making these significant further investments into ensuring that quality grass-court tournaments can be provided at all levels of the professional game for the best interests of the players and the broader tennis family."
The tournament in Birmingham was first held in 1982 and winners have included Billie Jean King, Martina Navratilova, Maria Sharapova, Kerber and Petra Kvitova.
By lifting the trophy for the first time this summer, French Open champion Barty surpassed Osaka to become world No 1.
The reduced prize money commitment - down from $1m (approximately £800,000) to $250,000 (approximately £200,000) - will allow the LTA to put more investment into community events around the competition.
Chief executive Scott Lloyd said: "We have worked closely with the All England Lawn Tennis Club on the plans for next year's grass-court season.
"The Nature Valley Classic in Birmingham will continue to be one of the LTA's major events next season and - like all of our events - will provide opportunities for tennis fans to get closer to the sport."
's-Hertogenbosh (ATP and WTA) and Stuttgart (ATP) will continue to host ATP events in the first week, with Queen's Club and Halle (ATP) in the second week. An ATP 250 event in Mallorca will be added to the calendar in the third week, while Bad Homburg is set to host a new WTA event, which is subject to approval, with events in Antalya and Istanbul being replaced.