Laing O'Rourke is winding down its housing division Explore Living for a minimum two years to allow the housing market to improves.
Explore Living will continue to complete the building of all existing projects, but future phases will be paused and the landbank mothballed until there is a sustained recovery in the UK house building market and a return of consumer confidence.
Most of the existing staff will continue to work with explore with only a handful of redundancies.
But chairman Paul Healey and managing director Karl Pickering are to leave Explore.
In a statement Laing O'Rourke said:
"We expect this period of inactivity to extend for a minimum of two years as the government's austerity measures and the scarcity of mortgage lending continue to suppress housing demand."
Explore Living has struggled to make a profit since being set up a few years ago.
It lost £8.2m on a turnover of £33m in 2010 and lost £4.4m on a reduced turnover of £19m last year.
