FINANCIALLY struggling AFL club Melbourne will almost certainly lose its major sponsor at the end of this year.

The Demons said telecommunications company iPrimus had advised them it was unlikely to renew its contract as naming rights partner, which is in its fifth and final year.

However, the club said negotiations were underway with a view to the company continuing as a lower level partner in coming seasons, with talks also being held with other potential sponsors.

"I would like to take this opportunity to thank iPrimus for their outstanding support and partnership over the last five years, and I am pleased that iPrimus would like to continue with us in some form," Demons president Jim Stynes said.

"Anyone who partners with our club now will be joining a club that is heading into an exciting new era."

The loss of the sponsorship deal is a blow to the club, which has recently made significant headway into erasing its $5 million debt.

The Demons raised more than $2 million at a fundraising dinner earlier this month, which kicked off their debt demolition campaign.