The event was first played in 1889 and has included champions such as Fred Perry, Rod Laver, Jimmy Connors, John McEnroe, Andre Agassi, Pete Sampras, Andy Murray and Andy Roddick before Canada's Milos Raonic completed a hat-trick of wins on Sunday.
Former player and broadcaster Justin Gimelstob, who is also an ATP board of directors member, told Reuters he was sad to bid farewell to the second oldest tournament in the United States behind the U.S. Open.
"It's been one of the landmarks of the tour," he said. "There are so many great champions who have won here. This negative trend is very disappointing."
Tournament owners San Jose Sports & Entertainment Enterprises, who are also in charge of the San Jose Sharks, opted to sell the event to a Rio de Janeiro group for both financial reasons and to prevent having to send their NHL team on an annual two-week road trip.
When the United States was dominating men's tennis and former major champions such as Sampras and Agassi were happy to play at one of their national tournaments, spectator attendances were good.
However, after Agassi retired in 2006 and Europeans began to dominate the tour, the event was unable to draw the very best players to the West Coast in early February when they knew they would have to travel to California for the mandatory Indian Wells tournament in March.
As well as the San Jose Open, California lost another of its events last year when the Los Angeles Open was sold and relocated to Bogota, Colombia.
"Putting my U.S. tennis fan and broadcaster hat on... America is a huge market and we need to make sure that the market is protected and incentivized," Gimelstob added.
"Putting my ATP board of directors hat on... it's a difficult business model at this smaller level having these outlying tournaments. How do they get the top players, television and sponsors?
"It's a bad cycle. Something needs to be done."
World number 16 John Isner said the fact that the United States did not have an active grand slam champion was also a major factor after Roddick, who won the U.S. Open in 2003, retired last year.
"Every American is working to do his best," Isner said. "It does hurt the marketability of the sport, especially in this area."
Former player Leif Shiras, who has either played or broadcast at the event since the early 1980s, said that losing events with a long history chipped away at the foundation of the game.
"The fact that we are losing another event in California... It's stunning to me we are allowing these things to happen," Shiras said.
"I look at France - they hang on to their events. If one city's event is not working they find another place for it to work and it's a wonderful way to keep their players plugging into the highest levels of game.
"In terms of player development and exposure to highest levels of game, I think it's worst possible scenario for the U.S." (Editing by John O'Brien)