The Hall family said they would return to traditional farming
The family-run Darley Oaks Farm in Newchurch, Staffordshire, has been hit by a six-year campaign of abuse.
The owners and people connected with the firm have received death threats.
The family said they hoped the decision would prompt the return of the body of their relative Gladys Hammond, whose remains were stolen from a churchyard.
I just feel so angry that these animal rights activists have won
Rod Harvey, former farm supplier
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The remains were taken from her grave in nearby Yoxall in October.
Mrs Hammond, who was buried in St Peter's churchyard seven years ago, was the mother-in-law of Christopher Hall, part-owner of the farm.
In a statement, a close relative of Mrs Hammond, who declined to be named, said there was now no reason why her body could not be returned.
"Gladys was a relative of the Halls by marriage only and had no involvement in guinea pig breeding.
"She was a kind, gentle country lady who loved animals. She was also friendly, generous and loving and always put her family first."
'Fantastic day'
The Hall family have been subjected to hate mail, malicious phone calls, hoax bombs and arson attacks.
A spokeswoman for David Hall and Partners confirmed that the business, where several thousand guinea pigs are reared, was to stop breeding animals for medical research.
The Hall family is now expected to concentrate on the arable side of the business.
The family hope that the remains of Gladys Hammond will be returned
Campaigners who have legitimately picketed the farm over recent years said they would continue their protest until the guinea pig breeding operation officially closed at the end of the year.
Johnny Holmes, a spokesman for Stop the Newchurch Guinea Pigs, said: "This is the most fantastic day of my life.
"It's a victory for the animals and it's a fundamental victory for the animal rights movement.
"Ideally, I wish they would close down today and hand them over. We want those guinea pigs out."
In a statement, the Association of British Pharmaceutical Industry (ABPI ) expressed its best wishes to the family and said their decision was "regrettable but understandable".
Director of the ABPI Philip Wright said guinea pigs had been essential in research into respiratory disease resulting in breakthroughs in the development of new medicines.
'Not a victory'
"The activities of a few animal rights extremists have placed impossible pressure on those going about their legitimate business," he said.
"While animal rights extremists are likely to be only one factor in the final decision, it does underline the need for greater protection of those individuals and companies targeted."
David Bird, from Staffordshire Police, told BBC Radio 4 it had been impossible to give complete protection because the campaign had been so widespread.
"We have had some success in dealing with those responsible. What I would say is that this closure is not a victory for anybody," he said.
Protesters have used graffiti to get their message across
"This campaign has done absolutely nothing to further the cause of animal rights."
Rod Harvey supplied fuel to the farm and endured four years of abuse from activists before he was forced to cease trading with the Halls.
The 63-year-old businessman said he received threatening letters, including one accusing him of being a paedophile which was then sent to a number of people he knew.
"In December 2003 a brick came through the window of my front door, hitting my foot and cutting my hand," he said.
"In view of what they (the Hall family) and their staff have had to put up with I'm not surprised that they have stopped breeding guinea pigs.
"I just feel so angry that these animal rights activists have won."
A forty-year-old British guinea pig farm is to close after a six-year campaign of intimidation by animal rights extremists culminated in the remains of the family's dead mother being dug up and stolen.

Glady Hammond's sons, who run the farm which breeds the guinea pigs for medical experiments, have been the victim of bomb threats, hate mail, malicious phone calls, an attempt to brand them as pedophiles, and arson attacks.

However last year's exhumation of their mother was the final straw. The remains of the 87-year-old, who died in 1997, were removed under the cover of darkness from the churchyard they were buried in, and have not been found.

Two men were arrested in connection with the grave robbery, but were later released without charge.

The family hopes that their announcement that the farm will close will lead to the return of their mother's remains.

A close relative of Mrs Hammond, who spoke anonymously to the BBC, said, "Gladys was a relative of the Halls by marriage only and had no involvement in guinea pig breeding. She was a kind, gentle country lady who loved animals."

Legal peaceful protesters were overjoyed at the news. Johnny Holmes, a spokesman for Stop the Newchurch Guinea Pigs, said: "This is the most fantastic day of my life." The group, which has picketted the farm for several years, says it will remain until all the guinea pigs have gone.

The group's website describes the experiments the guinea pigs were subjected to as being "horrendous", and have accused the farm of keeping tens of thousands of animals in poor conditions leading to many dying of malnutrition and neurosis. Video footage taken by the group inside the farm show many young animals dying and under extreme stress.

They also say the animals have been used for cosmetics research and for "unscientific" medical experiments.

The Association of the British Pharmaceutical Industry (ABPI), in an online statement, gave their best wishes to the Hammond family, and described the decision as "regrettable but understandable".

Their director of Science and Technology said, "Guinea pigs have provided essential information to support biomedical research into respiratory disease resulting in real breakthroughs in the development of new medicines."

The animals from the farm have been used in biomedical research, especially for respiratory diseases such as asthma. The ABPI also said that future animal research may be carried out in countries that do not have the strict welfare controls the UK has.