International airlines have for years struggled to repatriate billions of dollars in revenue held in the local bolivar currency due to exchange controls, prompting many to limit service and require that passengers pay fares in dollars.
"We deeply regret that for these reasons, we will be forced to suspend our service between Caracas and Frankfurt as of June 18," the company wrote in a statement, noting that demand for international flights to Caracas dropped in 2015 and the first quarter of 2016.
Lufthansa does not plan to shut its office in Caracas.
Following a two-year rout in oil prices, the South American OPEC nation is struggling with a deep recession and the world's highest inflation rate, which has put foreign travel out of the reach of most of its citizens.
American Airlines in March said it was scrapping a recently-reinstated direct flight between Caracas and New York due to low demand.
(Reporting by Diego Ore; Writing by Brian Ellsworth; Editing by Paul Simao)