Explaining the decision, a New England ISO spokeswoman said: "Cape Wind did not address their status by the deadline and proceedings to terminate the project as a resource have commenced.
"They will continue to be unable to participate in the wholesale markets," she said.
The 468MW project had five days after suspension before it was terminated. Once slated to be America's first offshore project, Cape Wind appears to be in disarray.
Speaking about the decision to suspend Cape Wind, the developer's spokesman said: "We do not regard this as relevant because Cape Wind will be qualified well in advance of coming online and actually producing energy for sale."
Cape Wind has also pulled out of a lease for land earmarked for staging the project.
On 31 December, National Grid and Northeast Utilities' NStar ended their power purchase agreements for 77.5% of Cape Wind's output.