The Detroit based unit created low-volume vehicles for GM's divisions designed to appeal to enthusiasts and bolster the company's image. Products included V-series Cadillacs and the Chevrolet Cobalt SS, HHR SS and a V8 version of the Colorado.
"All high-performance projects are on indefinite hold," said GM spokesman Vince Muniga. "The engineers are moving into different areas of the organisation, and they will work on Cadillacs, Buicks, Chevrolets and Pontiacs."
Mr Muniga said there are no plans for high-performance versions of any upcoming cars.
The move is in the spirit of GM's viability plan delivered to the US Treasury Department on Tuesday. In the plan, GM said its future-product focus is on fuel- efficient cars and crossovers.
It also pledged to increase its current offering of six hybrids to 14 by 2012 and to 26 by 2014. GM also boosted its request for federal aid by as much as US$16.6 billion.
The High Performance Vehicle Operations unit could be reinstated once GM regains its financial health, Mr Muniga said.