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Carlton have ended their alignment with the Northern Blues, effectively meaning the VFL club originally known as Preston will fold after 138 years.

Carlton have ended their two-decade partnership with VFL club Northern Blues as they look to slash costs during the AFL shutdown period.

The "extremely sad" decision means Northern, originally known as the Preston Bullants, will effectively wind up after being formed in 1882.

Carlton chief executive Cain Liddle said the club could no longer financially support their long-time reserves team.

"Northern have been part of the Carlton family for the last 19 years," Liddle said.

"Preston City Oval was a second home on the weekends for many Carlton players, staff and supporters.

"This is an extremely sad day for so many involved but Northern will always have a special place in the history of the Carlton Football Club."

Carlton will look to create their own VFL team if the season gets underway and will "lean heavily" on Northern Blues personnel.

"We are currently working with Northern Blues players to ensure they have access to ongoing support and resources," Liddle said.

Former Collingwood ruckman Josh Fraser, who has coached the Northern Blues for the last five years, expressed his sadness about the decision.

"These are unforeseen circumstances and there will be people doing it tougher than I am," he wrote on social media.

"Hopefully everyone is keeping themselves and loved ones safe."

Northern president Stephen Papal said the call was "as difficult as it gets".

"Our history extends 138 years and we are proud of each and every one of those seasons," he said.

"This football club has a rich history and we will do everything possible to ensure it remains in the hearts and minds of our supporters forever."

Preston joined the VFA in 1912, changing their name to the Northern Blues in 2011.

Current Carlton head coach David Teague led Northern to VFL grand finals in 2009 and 2010.