Uber has faced headwinds since its app went online in Denmark in November 2014 as local taxi driver unions, companies and politicians complained that Uber posed unfair competition by not meeting legal standards required for established taxi firms.

Uber, which says about 2,000 Danish drivers and 300,000 riders use its app, said in a statement that it would shut down its services in Denmark on April 18 due to the new law.

"For us to operate in Denmark again the proposed regulations need to change. We will continue to work with the government in the hope that they will update their proposed regulations and enable Danes to enjoy the benefits of modern technologies like Uber," Uber said.

Despite the minority liberal government's ambitions to deregulate the taxi business and accommodate new operations like Uber, the taxi law passed in February introduced measures such as mandatory fare meters and seat sensors.

"It is a shame, that there was not a majority in favor of the government's proposal for a significant liberalization of the taxi law, which would have made it easier for Uber and similar ride services to operate legally in Denmark," Transport Minister Ole Birk Olesen said in a statement.

At least three opposition politicians used Twitter on Tuesday to praise Uber's exit.

Two Danish Uber drivers were fined in November for violating taxi laws.

In December, Uber's European division was indicted by Danish public prosecutors for assisting the two drivers in violating taxi laws. The case will come to court by the end of April.

"When they (Uber) started two and a half years ago it was illegal and was ruled illegal several times. The new law has not changed that," Jan Villadsen, the president of the transport section in Denmark's biggest union 3F, told Reuters.

He said Uber's departure would help 6,000 taxi drivers in Denmark continue making a living.

Uber will keep its software development division in Aarhus in northern Denmark, where it employs 40 people working on its infrastructure software, according to the company website.

Uber said it would allocate resources to help Danish Uber drivers through the shutdown process.