Wilson Security says it will not renew its contract to run Australia's offshore detention centres in Papua New Guinea and Nauru.
In a statement, the Australian company said it would provide services until its contract expires in October 2017.
The decision follows the announcement by the service provider, Broadspectrum, earlier this year that it, too, would abandon the processing centres.
Wilson Security has come under intense criticism for its handling of the centres, where there have been numerous allegations of violence, abuse, and intimidation against its guards.
However, Wilson Security said it took pride in its performance.
The announcement leaves the Australian government without a service provider or security firm for its offshore detention regime.