The suspension will result in the permanent layoff of approximately 550 site employees, including those currently on temporary layoff since January of this year, when production was originally suspended.
A reduced workforce of approximately 200 employees will remain at the McArthur River and Key Lake sites to keep the facilities in a state of safe care and maintenance.
Cameco said it expects its share of the costs to maintain both sites to range between C$5 million (US$3.8 million) and C$6 million per month once these layoffs take effect.
In addition, to further decrease costs, the workforce at Cameco's corporate office will be reduced by approximately 150 positions including employees and vacancies.
As a result of the layoffs at the two sites and corporate office, the miner expects to incur between $40 million and $45 million in severance costs in the September quarter.
Cameco owns 70% of the McArthur River mine and 83% of the Key Lake mill, while joint venture partner Orano Canada owns the remainder. Orano has also agreed to extend the suspension.
Tim Gitzel, Cameco's president and CEO, commented: "Our results reflect the impact of a weak uranium market and the deliberate actions we have taken driven by the goal of increasing long-term shareholder value.
"We continue to expect to generate strong cash flow this year as we draw down inventory and focus on operating efficiently. However, we have not seen the improvement needed in the uranium market to restart McArthur River and Key Lake.
"This means we will extend the suspension of production at McArthur River and Key Lake for an indeterminate duration. It was a difficult decision to make, because of the impact it will have on our employees, their families, and other stakeholders, but we must take this action to ensure the long-term sustainability of the company. We thank our workforce for their hard work and dedication."