Johnston Press, the Scottish-based owners of the title, have closed the paper as part of a cost-cutting plan.
Three long-serving members of staff are leaving the compnay as part of the shake-up.
Donegal On Sunday was launched in March 2004 at the height of the Celtic Tiger and the boom in newspaper publishing and advertising.
But sales of the paper had declined to around 3,000 copies in recent months and advertising revenues in newspapers have slid by more than 70%.
Johnston Press says it will commit existing staff to its Tuesday and Thursday titles.