Operations at the observatory were halted in August when one of its supportive cables slipped loose from its socket, falling and creating a 30-metre hole in its 305-metre-wide reflector dish.
After determining that the structure was unstable, officials evacuated the facility and are working on a plan to safely dismantled the massive telescope.
The telescope has been a key scientific resource for radio astronomers for 57 years.
As soon as such a warning was received by the safety experts, the authorities made a decision to demolish the structure shortly.
The NSF said in a statement: "This decision follows an assessment by a number of independent engineering companies which found that the telescopic structure was in danger of a catastrophic failure and that its cables were no longer capable of carrying that weight".
SciFri producer Christie Taylor talks to Drake, former observatory director Mike Nolan, and astronomer Edgard Rivera-Valentín about the damage, as well as the telescope's irreplaceable role in detecting Earth-threatening asteroids, and its huge importance as a symbol for Puerto Ricans.
NSF's primary engineering firm said it should be decommissioned, and a review of the assessment by two additional engineering firms concluded any attempt to make repairs would pose a threat to human life, the release states. "It is therefore our recommendation to expeditiously plan for decommissioning of the observatory and execute a controlled demolition of the telescope".
In the 1970s, it was used to beam a message about Earth and humanity into space, along with the National Radio Astronomy Observatory at Green Bank, West Virginia through a NASA program called Microwave Observing Program (MOP).
The independent, federally funded agency said it's too unsafe to keep operating the single dish radio telescope - one of the world's largest - given the significant damage it recently sustained.
"While this is a profound change, we will be looking for ways to assist the scientific community and maintain that strong relationship with the people of Puerto Rico", Panchanathan added.
Two cables supporting the 900-ton instruments for the telescope above a radio dish 1,000 feet (305 meters) in diameter broke on 10 August and 6 November. They may have been created to support, "the NSF said in a statement". "While I am disappointed by the loss of investigative capabilities, I believe this process is a necessary step to preserve the research community's ability to use Arecibo Observatory's other assets and hopefully ensure that important work can continue at the facility".