"Despite the tireless dedication of players, staff, and supporters, it is no longer viable to continue the franchise at this level of competition," the team said in a statement.
The franchise was founded in 2020 after calls for many years for more Pacific involvement in Super Rugby, playing its first season in 2022.
The team focused on players of Samoan, Tongan and Cook Islands descent, and was based in Auckland.
A second Pacific based team, Fijian Drua, will remain in the competition.
Moana Pasifika chair Dr Kiki Maoate said disbanding the franchise was "one of the hardest decisions we have ever made".
"We are immensely proud of our players, staff, and the community who have supported our team over the years," Maoate said.
"Our commitment now is to ensure a smooth transition for everyone affected and to celebrate our legacy by finishing the season strong."
The team's 60 players and staff, led by coach Tana Umaga, were informed of the closure on Tuesday.
A spokesperson for New Zealand Rugby said there were other "parties exploring financially viable and sustainable plans for the future of the team".
"NZR is open to engaging with those parties to discuss the club's continued participation in Super Rugby Pacific," the spokesperson said.
"NZR remains supportive of Moana Pasifika's vision to create pathways from the Pacific and is saddened by the challenges the club faces."
Moana Pasifika is owned by the Pasifika Medical Association, and the New Zealand Herald reported running costs are more than NZ$10 million (US$5.9m) each year.
On the PMA website, it said the mission of Moana Pasifika is "to champion the collective power of Pacific people and culture and put it on a global stage, encouraging participation in sport and development and support of Pacific youth".