The announcement came hours after Continental Airlines said it wanted to convert six orders for the jet to less-expensive 737-800 jetliners.
"This decision reflects the market reality for the 757," said Alan Mulally, Boeing Commercial Airplanes chief executive. He said the plane would be replaced by Boeing's newest 737s and its planned 7E7 jetliner.
The single-aisle 757s once were popular for their fuel-efficiency and versatility in handling everything from short runways to high-altitude airports, all while meeting noise restrictions.
But the Sept. 11 attacks threw the jet's biggest customers -- U.S. airlines -- into turmoil. The jet also faces competition from the 737, which has grown to handle more passengers while costing roughly $20 million less per jet.
Five new orders have been placed for 757s in the past 21 months, and the backlog of 757s remaining to be built has shrunk to 18. Boeing's proposed 7E7 jet is also being touted as a replacement for the 757 and the 767, making some airlines less willing to buy a jet on its way out.
Boeing did not say what effect the production halt might have on employment.
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