The German government was providing a bridging loan to keep flights going, it added in a statement.
German rival Lufthansa said in a separate announcement it was in talks with Air Berlin to take over parts of the group.
Air Berlin has booked losses amounting to 1.2 billion euros (USD 1.3 billion) over the last two years, and has been relying on cash infusions from Etihad for survival.
The carrier had recently applied to the German states of Berlin and North Rhine-Westphalia for a public guarantee.
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"The reason for this conclusion is that its main shareholder Etihad Airways PJSC has notified Air Berlin PLC of the fact that it will not provide any further financial support to the Air Berlin group," the group said.
It added that two members of the board of directors, who joined after being nominated by Etihad, had resigned.
"The German federal government is supporting Air Berlin with a bridging loan secured by a federal guarantee to maintain flight operations," Air Berlin said.
Amid the restructuring, it was hit by a series of flight cancellations and severe delays, leading to a flood of complaints.
Lufthansa for its part announced that it was "already in negotiations with Air Berlin to take over parts of the airberlin Group and is exploring the possibility of hiring additional staff.
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