Wegelin & Co, the oldest Swiss private bank, said it would shut its doors permanently after more than two and a half centuries.
This follows its guilty plea to charges of helping wealthy Americans evade taxes through secret accounts.
The plea, in a US District Court in Manhattan, marks the death knell for one of Switzerland's most storied banks, whose original European clients pre-date the American Revolution.
It is also potentially a major turning point in a battle by US authorities against Swiss bank secrecy.
A major question was left hanging by the plea - has the bank turned over, or does it plan to disclose, names of American clients to US authorities? That is a key demand in a broad US investigation of tax evasion through Swiss banks.
Wegelin admitted to charges of conspiracy in helping Americans evade taxes on at least $1.2 billion for nearly a decade. Wegelin agreed to pay $57.8m to the US in restitution and fines.
Otto Bruderer, a managing partner at the bank, said in court that "Wegelin was aware that this conduct was wrong."
He said that "from about 2002 through about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the IRS."
When Wegelin last February became the first foreign bank in recent memory to be indicted by US authorities, it vowed to resist the charges.
The bank, founded in 1741, was declared a fugitive from justice when its Swiss-based executives failed to appear in US court.
The surprise plea effectively ended the US case against Wegelin, one of the most aggressive bank crackdowns in US history.
"Once the matter is finally concluded, Wegelin will cease to operate as a bank," Wegelin said in a statement last night from its headquarters in the remote, small town of St Gallen next to the Appenzell Alps near the German-Austrian border.
However the fate of three Wegelin bankers, indicted in January 2012 on charges later modified to include the bank, remains up in the air.
Under criminal procedural rules, the cases of the three bankers - Michael Berlinka, Urs Frei and Roger Keller - are still pending.
Although Wegelin had about a dozen branches, all in Switzerland, at the time of its indictment, it moved quickly to wind down its business, partly through a sale of its non-US assets to regional Swiss bank Raiffesen Gruppe.
A corporate indictment can be a death knell. In 2002, accounting firm Arthur Andersen went out of business after being found guilty over its role in failed energy company Enron.
A 2005 Supreme Court ruling later overturned the conviction, but it was too late to save the company.
Wegelin, a partnership of Swiss private bankers, was already a shadow of its former self - it effectively broke itself up following the indictment last year by selling the non-US portion of its business.
Dozens of Swiss bankers and their clients have been indicted in recent years, following a 2009 agreement by UBS, the largest Swiss bank, to enter into a deferred-prosecution agreement, turn over 4,450 client names and pay a $780m fine after admitting to criminal wrongdoing in selling tax-evasion services to wealthy Americans.
Analysts said Wegelin's plea "should serve as a wake-up call" to the world banking community servicing US clients to takes steps to ensure compliance with US law.
