"The paper is ceasing publication, and the company is going to close out its affairs in an orderly way," Editor Seth Lipsky said Monday.
Lipsky had been scrambling to attract new investors for the paper, one that laid claim to a grand tradition by taking the name of the original New York Sun, a Pulitzer Prize-winning giant that published for more than a century before disappearing in a merger in 1950.
On Monday, he gathered staff members and told them that last-ditch efforts to secure new money had failed, and that most would report to their last day of work on Tuesday.
"Not only did you appear in arms in a great newspaper war but ... you did so on your own terms, for principles you believed in, and worked with some of the greatest newspaper craftsmen and women of your generation," he told the group.
Lipsky had hoped to carve out a profitable niche among New Yorkers, and he was partly successful. The newspaper definitely carved out a niche, but it wasn't profitable.
Under the leadership of the hawkish Lipsky and managing editor Ira Stoll, the paper forcefully defended Israel, repeatedly sounded the alarm about Iran and backed President Bush's decision to invade Iraq.
The right-leaning paper also took political and socio-economic stances that were unpopular in a city teeming with Democrats.
"It was a newspaper especially savored by people who don't like The New York Times, and there are plenty of those in New York," said Alex Jones, a former Times reporter who now directs the Shorenstein Center on the Press, Politics and Public Policy at the Kennedy School of Government at Harvard University.
On Sept. 4, Lipsky announced the paper had endured "substantial" losses and would fail at the end of the month without an infusion of cash.
The news drew an unusual outpouring from politicians - including some who had previously seemed to stand at odds with the paper.
Former governors Mario Cuomo, George Pataki and Eliot Spitzer spoke out in support of the paper. In some of his first comments since he left office amid a prostitution scandal, Spitzer called the publication "one of the finest papers in terms of editing, writing, and analysis that one can find anywhere."
On Monday, Mayor Michael Bloomberg issued a regretful statement, saying: "Whether you agreed or disagreed with the Sun's writers, they were smart, thoughtful, provocative - and sometimes even courageous."
The weekday paper was scrappy, scoring scoops while facing down the competition with a smaller roster of reporters who focused on covering the city with vigor.
"The thing that it really provided and made it a successful niche publication was the local coverage," said Stephen B. Shepard, the dean of the Graduate School of Journalism at The City University of New York.
Many readers also found its arts section sophisticated and accessible at the same time.
The paper's demise wasn't entirely unexpected. The Sun's odds of survival were long after it began publishing on April 16, 2002, as newspapers began losing advertising to online sites.
Lipsky said the Sun was losing money despite increases in print advertising revenues the last three years. Lipsky, a former Wall Street Journal reporter and editorial writer, said it only had a paid circulation of about 14,000.
"That's a remarkably low paid-circulation," Shepard said. "You're not going to get a lot of advertising as a result, and that's why it failed. It was a valiant attempt."
Lipsky told staff his efforts to save the paper were complicated by the deep financial crisis facing the country.
"This month, not to mention this week, has been one of the worst in a century in which to be trying to raise capital," he said in a copy of his comments provided to The Associated Press. Staffers were told they would be paid through November and keep their health insurance through the end of the year. The paper would not declare bankruptcy, he said.
The paper's investors included Canadian newspaper baron Conrad Black and several prominent New Yorkers with deep pockets. Estimates of the initial investment ran from $20 million to $25 million.
The Sun began business operations in October 2001. It didn't last nearly as long as its namesake, which won a Pulitzer Prize in 1949 for a series of 24 articles that exposed waterfront corruption and became the inspiration for the film "On the Waterfront."
The original Sun, founded in 1833, was a pioneering newspaper in New York City. In 1846, its then-owner, Moses Yale Beach, arranged to share news from the war in Mexico with four rival papers. That agreement marked the founding of The Associated Press, today the world's largest newsgathering organization.
The old Sun was also known for its "Yes, Virginia, there is a Santa Claus" column - its response to an 1897 letter from an 8-year-old girl asking if there really was a Santa Claus.
