The pullout from TV LCD manufacturing follows the company’s withdrawal from plasma TV production three years ago.
Panasonic has been making liquid crystal display panels for TVs at its Himeji factory in western Japan since 2010. Company executives are now planning to end production of the parts by September.
It says it will continue to manufacture LCD panels at the plant for products other than televisions, such as medical equipment and cars.
But it says cuts in output will lead to transfer of hundreds of workers to other factories or offices, out of about 1,000 currently employed at the plant.
However it says ir will keep making Panasonic-brand televisions, using panels supplied by other manufacturers.
The move leaves Sharp and its Taiwanese parent firm Hon Hai as the only producer in the land of the Rising Sun.
Panasonic said that its executives are trying to streamline operations to focus more on profit, rather than scale of sales.