The partnership dates back to the 1992-1993 season but will conclude with the final in Lisbon in May, European soccer's governing body Uefa said on its website (www.uefa.org) on Monday.
Ford and other car companies have been faced with a shrinking market in Europe in recent years because of the impact of the financial crisis.
"Now is the right time for Ford to move in a new direction as we accelerate new product launches in Europe, with more than 25 new vehicles coming over the next five years," said Mr Stephen Odell, president of Ford Europe.
Ford is planning on revealing a specially made spot to promote its Mustang model at the UEFA Champions League Final in Lisbon this year, marking an end to its 21-year sponsorship.
Ford began its support of the UEFA Champions League at the inception of the tournament in the 1992/93 season, and has used the event to launch several car models over the past two decades, including the Ford S-Max, the Kuga, and new generations of the Fiesta, Focus and Mondeo.
The "special activation" for the Mustang this year, which Ford has not yet revealed details of, is expected to be seen by 300 million television and online viewers in more than 200 countries, as the new model goes on sale across Europe next year for the first time in the car's 50-year history.
The activity will be amplified through work at the UEFA Champion's League festival in Lisbon from 22-25 May, supported by digital and social media work.
Odell, also added: "With the arrival of Mustang in Europe, we are finishing on a high point our long-standing sponsorship of the UEFA Champions League.