The newspaper was targeted in a rolling crackdown by Bahrain's Sunni-led government against Shi'ite opposition political groups and activists after it crushed anti-government protests and declared martial law in March.
The government suspended the paper last month, accusing it of falsifying news about sectarian unrest and the government crackdown. It also said it posed a threat to the security of Bahrain, a U.S. ally that hosts the U.S. Navy's Fifth Fleet.
The crackdown, in which fellow Sunni-led Gulf states sent troops to back Bahrain's forces, has seen Bahrain issue the first death sentences to its citizens in over three decades and boosted tension with Iran, which Bahrain accuses of manipulating its Shi'ite co-religionists to expand its influence.
Al Wasat resumed publication following its suspension a day after three editors left the paper, including editor-in-chief Mansour al Jamri, the son of a former Shi'ite opposition leader. Prosecutors later questioned the three over the accusations.
A source close to the newspaper told Reuters the last edition of the newspaper would appear on May 9: "It's for economic reasons, the commercial viability was gone."
Bahrain has no private broadcasters and other newspapers toe the government line on political and sectarian affairs.
Al Wasat began publication after Bahrain launched political reforms a decade ago after political unrest in the 1990s that highlighted tensions between the ruling family and the Shi'ite majority, which says it faces systematic discrimination.
King Hamad bin Isa al-Khalifa said in a statement carried in newspapers on Tuesday that a free press still played a role in Bahrain's political process.
The U.S.-based Committee to Protect Journalists has criticised Bahrain's measures against the paper, saying the accusations were unsubstantiated.
Bahrain detained hundreds of people after crushing the protests in March, and at least three have died in custody. International human rights groups say hundreds of people have been sacked from state jobs for taking part in the protests.
A military court last week sentenced three protesters to death over the killings of policemen during the protests, drawing a mild rebuke from Washington, after a trial that local and international rights groups have called unfair.
Bahrain says it has targeted only those who committed crimes during the protests. The kingdom says it has referred about 400 people detained following the protests for prosecution.