After more than 50 years of service, the ministry has shut down its UFO investigation unit, saying it could no longer justify the cost of running the service.
The ministry said it had found no evidence of a threat to Britain or proof of the existence of extra-terrestrials, despite the public sending thousands of reportings of UFOs to a ministry hotline and email address.
It said it held no opinion on the existence or otherwise of alien life, but added it had "no specific capability for identifying the nature of such sightings."
"There is no defense benefit in such investigation and it would be an inappropriate use of defense resources," it said.
Any threat to the country's air space would be spotted by radar checks and dealt with by Royal Air Force (RAF) aircraft, a ministry spokesman said.
Resources would be focused on more important priorities, including the war in Afghanistan, where Britain has 9,000 troops fighting Taliban insurgents, as part of NATO forces, he added.
The dedicated UFO officer who dealt with the reports has been re-assigned to another post, saving 44,000 pounds ($73,000) a year.