Earlier this week, the BBC had also promised to "never" broadcast clips from this interview, after a report had concluded that they had covered up "deceitful behaviour" on Martin Bashir's part when securing this interview.
"Now we know about the shocking way that the interview was obtained, I have decided that the BBC will never show the programme again, nor will we license it in whole or part to other broadcasters", director general Tim Davies said.
"It does of course remain part of the historical record and there may be occasions in the future when it will be justified for the BBC to use short extracts for journalistic purposes, but these will be few and far between and will need to be agreed at executive committee level and set in the full context of what we now know about the way the interview was obtained".
"I would urge others to exercise similar restraint".
This interview made headlines, as BBC journalist Martin Bashir spoke to Princess Diana about her marriage. The interview saw the Princess of Wales utter those famous words, "there were three of us in this marriage, so it was a bit crowded".
Scriptwriters revealed that they were working on series five of the Crown, and they have incorporated this new interview into this storyline.
"Season five of The Crown will dramatise events surrounding the Panorama interview, given the pivotal part it played during the time period the new series covers", a source revealed. "It will reflect what we now know about how the interview was obtained and how Diana was treated".
The series itself will see Dominic West star as Prince Charles, and Elizabeth Debicki portraying Princess Diana.
It is expected to air in November, with the show intially due to end after this upcoming series. However, writer Peter Morgan has announced that it will be stretched to a sixth series.
