The company - whose ambitions for Vaunt were reported earlier this year - has announced it will be shutting down its New Devices Group, which may result in "some layoffs" from the team of around 200 people.
In a statement, Intel explained: "Intel is continuously working on new technologies and experiences. Not all of these develop into a product we choose to take to market.
"The Superlight [the codename for Vaunt] project is a great example where Intel developed truly differentiated, consumer augmented reality glasses."
The firm added that it would be taking "a disciplined approach" to future projects, and admitted the decision had been a "tough" one.
As reported by The Information, the statement continued: "We are going to take a disciplined approach as we keep inventing and exploring new technologies, which will sometimes require tough choices when market dynamics don't support further investment."
It comes after Jerry Bautista, the lead of the Vaunt project, had appeared optimistic for its future.
He previously told The Vault: "[Intel is] working with key ecosystem hardware providers - whether they're frames or lenses and things like that. Because we believe there's a whole channel to people who wear glasses that's already there."