US President Donald Trump said in February he was ordering Treasury to halt what he called the "wasteful" minting of pennies, prompting service stations, fast-food chains and big-box stores to adjust prices and round cash transactions.
Treasury said rising production costs and rapidly changing consumer habits and technology had made production of pennies "financially untenable" and unnecessary, noting that it now costs 3.69 US cents to make each penny, up from 1.42 US cents a decade ago.
Suspending their production is expected to save the US Mint about $US56 million ($A86 million) a year, Treasury said.
Pennies will remain legal tender, with an estimated 300 billion of them in circulation, "far exceeding the amount needed for commerce," Treasury said.
"Sad to see the penny go but it was inevitable given rising costs," American University professor Gabriel Mathy said, adding the iconic coin would "stick around for a while, though people may start hoarding pennies".
The US is joining other countries including Canada, Australia, Ireland and New Zealand in phasing out their lowest-value coins, rounding cash transactions up or down to the nearest five cents while keeping electronic payments exact.
The penny was first issued by the US government in 1793.
Since 1909, the profile of president Abraham Lincoln has adorned the obverse side of the coin made of zinc and copper.
In fiscal year 2024, pennies accounted for 57 per cent - or 3.2 billion - of the Mint's total production of 5.61 billion circulating coins.
The Mint will continue to produce collector versions of the penny in limited quantities, Treasury said.
Supporters of the penny have argued that it helps keep consumer prices lower and is a source of income to charities.
Back in 1793, a penny could buy a biscuit, a candle or a piece of candy.
These days, many sit in drawers or glass jars and are basically cast aside or collected as lucky keepsakes.
with AP
