Summer flights to Faro, in Portugal, are also being dropped while the airline's service to Liverpool is being reduced to twice a week.
City of Derry Airport said it was "extremely disappointing news".
John Kelpie of Derry and Strabane District Council said the airport was in discussions about a twice daily service to a London airport.
In a brief statement Ryanair said its Derry 2017 summer schedule has yet to be finalised.
However, the airport confirmed the Stansted flights will stop in March 2017 while the Faro flight will be axed from April of next year.
"The London connection is by no means lost," Mr Kelpie said.
"Nothing is guaranteed in a highly volatile environment, in a trading environment such as this, but our plans have been well made and well laid."
Mr Kelpie said the Northern Ireland Executive has been "extremely supportive" and said discussions about a Stormont route development fund had been "positive."
"That fund will enable us to diversify routes, attract new airlines into the airport and to enable the airport to expand."
Alan Law of trade union NIPSA described the cuts as "devastating."
"The impact of Air Passenger Duty continues to disproportionately affect the airport and this remains a huge issue which local politicians need to grasp," he said.
Last week, City of Derry Airport chairman, Roy Devine, told local councillors the airport would not break even until 2021/22.
In August, Ryanair announced it was to reduce the number of flights it operates from City of Derry Airport to London Stansted.
From 30 October, the Irish airline will cut its daily service and instead operate six flights per week.
The Derry airport is currently running at a Â£2.145m loss per year, paid for by local ratepayers.
Low cost airline Ryanair is to axe its Londonderry to London route, the airport has confirmed.