The Royal Canadian Mint will officially stop circulating pennies as of Feb. 4, 2013, the Finance Department announced Monday, although the one-cent coin “will retain its value indefinitely.”

The announcement comes after the federal government included scrapping the penny in its March budget, saying at the time the little coin is “a currency without currency.”

The government cited “excessive” production costs relative to the coin’s value as a key reason for the move, saying it costs taxpayers 1.6 cents for every coin minted.

Ceasing production of the penny will save taxpayers about $11 million per year.

“Setting a clear transition date will allow consumers, businesses, charities and financial institutions to plan accordingly in the lead-up to February,” Finance Minister Jim Flaherty said Monday.

Back in May, when the final penny came off the production line at the Royal Canadian Mint in Winnipeg, Flaherty said that while the one-cent coin was once “a workhorse of Canadian commerce,” it is now costing businesses more to process pennies, which stymies production and growth.

And while the Mint has found ways over the years to cut the cost of manufacturing currency, the penny emerged a money-losing product.

For consumers, the Finance Department said Monday, when a penny is not available, cash transactions will be rounded to the nearest five-cent increment “in a fair and transparent manner.” Electronic transactions, such as credit- or debit-card purchases, will not be affected.

The February date was set after the government consulted with small-business owners and retailers, who asked that change take effect after the busy holiday shopping period.

While Canadians are encouraged to roll up their pennies and take them to the bank, or donate them to charity, the Finance Department says they will “retain their value indefinitely and can continue to be used in payments.”

The penny has been in use in what is now Canada since 1858. The first coins in the Dominion of Canada were issued in 1870, while it was first domestically produced in 1908.