Managing director Colin Woodall has taken the decision, due to ill health and the fact that he lacks a successor. The closure will result in the loss of 21 jobs.
The manufacturing rights of the company have been sold to national firm Cranswick Country Foods, which will continue to produce goods under the Richard Woodall brand.
Woodall is the eighth generation of his family to have worked in the business – for the past 35 years – and has been marketing director since 2003, and managing director since 2007.
However, Woodall has had leukaemia for three-and-a-half years and, since being diagnosed, has only been able to work on a part-time basis.
"I have tried throughout the period to keep the company going, but it’s increasingly obvious that having a part-time managing director doesn’t work," said Woodall.
“It was a very difficult decision and had I not been ill it would not have been taken.”
"It is a very emotive time, a very sad time and the sale is not a decision I have taken lightly. I do need to think about my health. It is not a decision we wanted to take."
Woodall said he hoped to keep the village shop and post office, that the firm also owned open, but said a change of name in the new year would be likely.
"The Richard Woodall brand will live on and I am sure it will develop and progress under the Cranswick ownership."
Richard Woodall of Waberthwaite was founded in 1828 and is one of the oldest family-run firms in the country.
The company supplies the royal household with its range of hams, bacon and sausages, as well as supplying a number of national retailers, including Selfridges. Woodall will retain this royal warrant.