The service began in May and was the only international route operated by the airport, which also runs flights to London Stansted and Jersey.
In a statement, Flybe apologised for the suspension of the flights, which will begin on January 12.
It said: “Following the completion of an extensive review into its operations at Dundee Airport, Flybe regrets to announce that it has decided to suspend its Dundee to Amsterdam service with effect from Monday January 12.
“Flybe will continue to offer those customers with existing bookings the option of a full refund or a road transfer between Dundee and Edinburgh with a flight between Edinburgh and Amsterdam.
“The airline sincerely apologises for any inconvenience caused by this decision.”
Airline chiefs said that due to topography and high levels of light aircraft activity in the area, it became clear enhanced radar coverage is required to accommodate large passenger aircraft.
Flybe said it aims to restart the service in the future once necessary measures are implemented.
Executive chairman Simon Laffin said: “We have tried very hard to find a way to operate out of Dundee but we would need better radar coverage to operate in the area.
“We very much hope that this can be provided in the future to allow our flights to resume.”
Highlands and Islands Airports, which owns Dundee Airport, said it felt good progress was being made in finding a solution.
A spokesman said: “Whilst disappointed in the decision being made, we are encouraged by the fact that Flybe see this as a suspension rather than termination of the flight and that they plan to restart the service in the future.
“The Dundee Airport team will continue to work to resolve the new requirements they have around enhanced radar coverage and will present those to the senior Flybe team in due course.”