Board president Sue Cassidy said the race was "a major drawcard" and "deserves a significant sponsor".

"Lyndoch Living's sponsorship was initially part of the Waterfront Apartments sales and marketing strategy, but with the sponsorship up for renewal and the apartments secured, it was the right time to reconsider our ongoing involvement," Ms Cassidy said.

A spokesman said Lyndoch had been a "proud sponsor" of the event for six years, but "its sole focus now is to ensure the safety and care of residents and staff, while addressing ongoing challenges in its facilities".

A section of the Warrnambool community has long campaigned against Lyndoch's sponsorship of the event, suggesting the funds would be better spent on resident care.

The Standard suggested in mid-July Lyndoch's sponsorship was likely to end when it revealed Warrnambool Racing Club had started searching for a new backer for the steeplechase.

At the time Ms Cassidy said the board hadn't discussed the issue and WRC chief executive officer Tom O'Connor said the search process had been initiated by the club, rather than Lyndoch pulling out.

But Ms Cassidy said it was Lyndoch's decision not to renew.

"The club fully supports our decision not to continue with another sponsorship term. We would like to thank Tom and his team for their commitment to ensuring our residents, clients and staff always felt at home during the carnival, and wish them all the best in securing the next sponsor," she said.