It means victory for Sony's Blu-ray format but will leave questions for all those who bought into the failed format as well as raising issues about whether anyone can benefit from a format war.
Q: What is the HD DVD format war all about?
HD DVD and Blu-Ray have been battling to become the pre-eminent format for next-generation DVDs for the last couple of years. Toshiba had its HD DVD format approved by the DVD Forum back in 2004 and the first products hit the market in the US in April 2006.
The same year Sony pulled its Blu-ray format out of the bag.
Initially the two formats seemed to have an equal number of backers although there was general dismay in the industry that a new format war could slow down developments of a nascent market and be confusing for consumers.
Toshiba, for its part, said it never intended to enter a format war.
"Blu-ray wasn't submitted to the DVD Forum. We did it right and we didn't expect this battle," Olivier VanWynendaele, deputy general manager at Toshiba, told the BBC News website.
He added that the firm was "very sad" to see the end of the format it had such high hopes for.
Q: Why has Toshiba backed down?
The firm itself identifies the tipping point as Warner Bros' decision to back Blu-Ray, a decision it said it was very surprised at.
It also points to the loss of key retailers - in February Wal-Mart announced that it would phase out HD DVD products, UK retailer Woolworths said it would only promote Blu-Ray in store while US chain Best Buy also came down firmly in the Blu-Ray camp.
US online retailer Netflix said it would also focus on Blu-Ray as have several content owners, including Constantin Film in Germany and National Geographic.
"It became increasingly difficult for us to gain access to the market," said Mr VanWynendaele.
Others point to the power of Sony's PlayStation 3 which has an in-built Blu-Ray player. The figures speak for themselves - 10.5 million PS3's have been sold compared to one million HD-DVD players.
Analysts see Toshiba's swift admission of defeat as being a better long-term strategy for the firm than carrying on with a dying format.
The market seems to agree - Toshiba Corp shares rose 6% in response to the news.
Q: What does it mean for consumers?
Those who rushed out and bought a HD-DVD player when it went on the market in the UK paid a hefty 449 for it and they could be understandably angry about Toshiba's pull-out.
For its part Toshiba said it had "no plan to compensate consumers", and will continue to offer technical support for those owning HD DVD machines.
In fact, according to Toshiba, the players - now available for just 149 - are still a good value option for consumers, despite the diminishing amount of content available to play on them.
The machines can still be used to "upscale" standard definition movies for high definition screens.
For consumers who have bought a HD DVD add-on for Microsoft's Xbox 360 console, there was no word as to whether the software giant will phase out the add-on.
In a statement Microsoft said it was too early to say but added that games, rather than high definition movie playback, was the main reason why consumers bought consoles.
Q: What other format wars have there been?
For Sony, victory this time around is a case of third time lucky because it has lost two previous format wars.
The now-famous tussle between video formats - VHS and Betamax - interestingly saw Toshiba as a partner rather than a rival to Sony.
Although many felt Betamax was the superior format, most cite the longer recording length of VHS tapes - three hours versus one - and the cheaper manufacturing costs for VHS machines as the main factors why VHS eventually won out.
In the early nineties Sony was caught up in another format battle, this time about who would control what would become the DVD market.
At the time there were two high density optical storage formats were being developed. Sony and partner Phillips offered the MMCD (Multi-Media Compact Disc) format while the SD (Super Density) format was backed by Toshiba and Matsushita among others.
While the VHS/Betamax format war was a long and costly struggle, the battle to take charge of the DVD market was an altogether a quieter affair, ending with a compromise.
The super density format was used as the basis of DVD with a couple of tweaks form the Sony camp.Opposition joy Cold War to thaw? Battling on
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