The decision to shut down Large, which is trading profitably, is said to have been mutually agreed by Danny Kleinman and Jeff Stark, the owners of the company.
A disproportionately large slice of its output was Kleinman-directed jobs.
Stark explained: "The original idea was to take pressure off Danny and myself and make a company that was less reliant on our turning over."
Kleinman added: "In order to keep it profitable, we would have had to drastically change the company from the format we set out with. Rather than change the idea of what the company should be, or run into financial difficulties in the future, we decided to quit while we were ahead."
Kleinman indicated that he would direct independently in the immediate future. He will continue to work with his long-standing producer, Johnnie Frankel.
Stark and his producer Cathy Green, one of the company's joint managing directors, plan to move to another production company.
Bertie Miller, another joint managing director and a close colleague of Kleinman's, has taken an indefinite break from the production business.
Stephen Gash, the company's third joint managing director, is considering his options.
Meanwhile, Colin Gregg, a leading director on the Large roster, has been snapped up by Therapy Films.
Simon Green, Siri Bunford and Steve Bendelack are among the other directors now without representation.
When it formed, Large aimed to be a significant force, shunning the "boutique" culture favoured by many other production companies. It hoped to benefit from the strength and depth of a large directorial roster and the economies of scale it afforded. However, according to Kleinman, the cost savings failed to materialise.
Kleinman is a prolific director, having worked on everything from the Xbox launch campaign by Bartle Bogle Hegarty to the recent Foster's Ice ads for M&C Saatchi. Stark, who shared much of the company's output, recently directed an M&C Saatchi spot for NatWest.
The company will be wound up once it has finished production on its confirmed slate of commercials. It is currently in production on six commercials, including work for PlayStation, through TBWA\London, and Smirnoff, through J. Walter Thompson.
X-Large, Large's promo division, and its US link-up, Epoch at Large, are likely to continue as separate entities.