The station's output will end on Friday 29 June, with the last presenter show aired on Friday 1 June, amid claims it is costing up to £750,000 a year to run, with advertising proving hard to attract.
Capital Disney was launched in 2002 by Capital Radio but since then GCap Media has started Fun Radio, another station for young children, which is involved in the National Grid Wireless bid for the second digital multiplex.
Meanwhile co-owner Disney was revelaed to be involved in the 4Radio multiplex bid with a format aimed at eight to 12-year-olds.
A statement announcing the closure was posted on the station's website, which will also close with the end of braodcasting, saying: "Capital Disney was one of the pioneers of DAB digital radio and a lot has changed in the world of radio in the last five years".
It goes on to thank listeners for "being our friend and helping to make us the success we are today".