Birmingham City Council is the latest in a growing group of local authorities to close its school library service (SLS).
The authority, one of the biggest in the country, ended loans to schools in January and is now attempting to sell its book stock to schools.
The council said the service was being used by fewer than half of its schools - 149 out of the 404 that are eligible - and that it was predicted to make a loss in this financial year.
A council spokesman said: "Schools are under no obligation to purchase school library services and there has been a marked drop in demand for this service in recent years and, as a consequence, the SLS will make a loss."
He added that the decision had been made after only 8 per cent of schools had guaranteed before Christmas that they would buy the service next year.
But the news has impacted on some schools already. Simone Gaeta, a teacher at Starbank Primary in Birmingham, has responsibility for the school library and said that her school had not bought into the service.
She said: "The loss is a tragedy. I think for those schools which are using it, it is quite cost-effective. You get books and send them back and get some more; it is like renting them."
Since April 2010, Cambridgeshire, Solihull and Kent councils have closed their school library services. Sutton has said it will close its service at the end of this financial year. SLS in Haringey and Gateshead are also facing an uncertain future.
However, Birmingham's closure was unexpected. Helen Boothroyd, former chair of the Association of Senior Children's and Educational Librarians, said: "It came as a shock to us in the school library service community. Birmingham is long established and has an excellent reputation."
She added that it was worrying that the decision had been made long before schools knew their budgets. She said: "Schools are conservative, with a small `c', and their perception of their budget could be that things are worse than they turn out to be. Overall, the picture is not as bleak for schools as the rest of the public sector."
Russell Hobby, general secretary of the National Association of Head Teachers, said the current climate did not leave headteachers with much flexibility: "The difficulty with these buy-back services is that they are offered as if schools have the freedom to choose, but that freedom of choice is then removed. There is a tipping point where they become an unsustainable service, which means that many schools may want to buy into the service but are prevented from doing so.
"Headteachers don't have much choice in their budgets. They have fixed costs to pay, such as teachers' salaries. The list of things they would like to spend money on is long and there is only so much money. There are some valuable activities that will be on the wrong side of that line."
SURVEY RESULTS - The story so far
- A TES survey of school library services (SLSs) in 149 authorities last term found that 87 had their own service, 31 had a service from another authority and 31 had no service.
- Three services have already closed in this financial year: Cambridgeshire, Solihull and Kent.
- Since the survey, Birmingham and Sutton have said their services will close by the end of this financial year. The service in Greenwich has been suspended since 2009.
- About 12,000 of the 17,000 schools that have services available do sign up to them, an average of 70 per cent.
- These services support 3.6 million pupils.
- They own 13.6 million items - artefacts as well as books - which are available to teachers.
- Original headline: Latest library service closure is `tragic loss'