Canada's last penny was struck Friday at The Royal Canadian Mint's manufacturing facility and will become a museum piece as the one-cent coins are withdrawn from circulation.

"For over a hundred years, the penny played an important role in Canada's coinage system," said Finance Minister Jim Flaherty.

"Although the cost of producing the penny now outweighs its value to Canadian consumers and businesses, it has had a long history that is worthy of recognition."

The last penny struck for Canadian circulation will be entrusted to the Currency Museum of the Bank of Canada in Ottawa, he said.

Flaherty announced in March the end of the penny, saying it would save the Treasury $11 million per year in manufacturing and distribution costs, as the government looks to trim its budget deficit.

Due to rising labor, metal and other manufacturing and distribution costs, each penny cost more than 1.6 cents to produce.

The penny will retain its value indefinitely and can continue to be used in payments, but as the coins are gradually removed from circulation, cash transactions will have to be rounded to the nearest five-cent increment.

Over the past five years, the Mint's plant in Winnipeg, Manitoba, produced 7,000 tonnes of pennies annually.

[A Canadian penny is pictured in March 2012 via AFP / Michel Viatteau]