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The Great Britain men and women's full-time sevens programme will be scrapped at the end of July.
There will be no more permanent contracts, with players instead coming together to train and play on the World SVNS Series.
The unions say the decision has been driven by financial pressures and a bid to improve the crossover with the 15-a-side game.
The restructuring comes just days after Irish rugby ended its men's sevens programme.
"The financial structure of the World Series over the past few years has become increasingly challenging and placed strain on the GB7s approach, which we must remodel," Scottish Rugby performance director David Nucifora said.
"With an increasingly congested sevens calendar and crossover opportunities with the 15s game reducing, we are taking time to review how best the format can work both from a player development and financial perspective," added RFU performance director Conor O'Shea.
As it stands, England has 27 contracted players across the men and women's game, Wales six and Scotland three, although not all are full-time.
The GB sevens teams have competed at three Olympics since the sport was added to the Games in 2016, with the men winning silver in Rio 2016 but failing to qualify for Paris 2024.
The women have yet to win a medal, finishing fourth at Rio and Tokyo.
"GB7s does not receive central Olympic funding, unlike many other unions it is competing with, and we believe the model the series is run under could be more financially effective for individual unions," added O'Shea.
"This is something we are continuing to talk to World Rugby about."
The RFU has also cited the loss of the London leg of the World Series as another reason for the financial shortfall.
In the past decade or so, the men's 7s and 15s forms of the game have been kept separate, with very few players in the UK and Ireland switching between the two.
However in the 1990s and 2000s a host of senior England 15-a-side internationals played sevens at the start of their careers, with Ugo Monye and Danny Care telling the Rugby Union Weekly podcast this week it helped them develop as players in the longer form of the game.
But there are concerns a part-time programme will mean GB will struggle to compete on the world stage.
"We believe the camp-based approach we are taking will provide the best development opportunities for players from the men's and women's game given current financial constraints and the congested schedule," added Welsh Rugby Union interim performance director Huw Bevan.
"We will continue to work with the other unions and World Rugby to explore the on-going role sevens plays within our development pathway."
