The MMO will shut down in January due to lack of subscribers.
The Lego Universe game was launched last year and was made free-to-play later, in an attempt to increase users.
The closure could mean as many as 115 employees will be made redundant as two studios are set to cease trading - Play Well in the US and a second facility in Denmark.
The project's executive Jesper Vilstrup, commented: "Unfortunately, we have not been able to build a satisfactory revenue model on our target group."
The Lego Group said it would still work with TT Games and Warner Bros Interactive to produce further games based on its brands.