Launched in Nottingham last November by charity Action Hunger, the machine stocked items such as fruit, socks and toothpaste.
Up to 100 homeless people were able to access the vending machine 24 hours a day using a traceable key card.
Nottingham City Council described the idea as a “misguided and ill-informed attempt to address complex problems” surrounding homelessness.
Toby Neal, from the city’s local authority, told the BBC: “This is a well-meaning but misguided and ill-informed attempt to address complex problems faced by people with accommodation and health issues.
“There is no evidence that it helps, and may distract people from finding long-term solutions.”
The charity said the decision not to support the project further was a “shame” for Nottingham but that plans to launch more of the vending machines are in the pipeline, including in London, Birmingham and Manchester.
Councillor Dr John Doddy, a trustee for Action Hunger, said: “This will turn out to be a tremendous shame on Nottingham city, or perhaps even a national shame.
“This is not some misguided adventure, this is a real contribution to the growing problem in this country.”