"The war in Ukraine has worsened the risks for the project," Fennovoima said in a statement, also citing "significant delays".

The proposed 1,200-megawatt Russian-designed reactor was to be built in Pyhajoki, about 100 kilometres (60 miles) from the port of Oulu in northern Finland.

The Hanhikivi 1 project, of which Rosatom owns a 34-percent stake with the remainder held by a Finnish consortium, had been delayed several times and the construction permit had not yet been granted.

It had been one of the major industrial projects involving a Russian company in the European Union, though there had been many uncertainties about its future.

Two days before Russia's invasion of Ukraine, the Finnish government had said it was re-evaluating the security risks for the 7.5-billion-euro deal.

Fennovoima said the decision to cancel the contract was "not made lightly".

"In a such a large project there are significant complexities and decisions are made only after thorough considerations", it said in a statement.

Finland currently has five nuclear reactors at two plants, both located on the shores of the Baltic Sea, currently providing about 30 percent of the country's electricity.

The fifth reactor, Olkiluoto 3 built by the French-German consortium Areva-Siemens, went online in March and will provide 15 percent of Finland's electricity when it begins producing at full capacity in September.