The European Commission has confirmed that it received a complaint over the Stormont Executive’s support for a United airlines route from Belfast to New York.
The Executive supported the route financially with around £9m after a European funding package supporting the airline’s route to Newark was withdrawn.
It now means that flights from Belfast International Airport will cease to operate from January of next year.
A statement from the Commission said: “EU state aid rules in the aviation sector allow public authorities to grant support to improve the accessibility of a region and to meet citizens' transport needs.
“However, those rules do not allow public authorities to grant a specific airline an undue advantage to the detriment of competing airlines and distorting competition in the Single Market.
“The Commission takes note of the fact that the Northern Irish authorities and United Airlines have decided to end a recent arrangement, according to which United Airlines would receive financial support for continuing to operate its Belfast-New York route.
“Such support can raise concerns under EU state aid rules, because United Airlines competes directly on transatlantic routes with other carriers and airports compete for traffic on those routes.
“The arrangement was put in place without prior notification to the Commission under EU State aid rules. The Commission received a complaint alleging that the measure was in breach of EU rules and looked into the matter. The United Airlines announcement allows the Commission to close the case.”
The First Minister said that NI's membership of the EU had caused problems.
"I think it was worth doing, I think it was the right thing to do at the time, but unfortunately the EU did not agree with us," she said.
"They have decided that we cannot proceed with what they call state aid and because of that United quickly took the decision, paid back any money that they had already received and they are now going to be leaving Belfast International Airport at the beginning of January.
"Of course, if we had not been in the EU, we would have been able to do it and that is the fundamental nub of this.
"I think if I were to look for a very practical expression of state aid bureaucracy, here it is."