After a long strike and a bitter circulation war, the Montreal Star, one of Canada's oldest and most respected afternoon newspapers, has ceased publication.

The 111-year old daily stopped printing today and its owners, F. P. Publications Ltd., said the paper's assets will be sold.

The Star resumed publication in February after an eight month strike and has been locked in a bitter circulation fight with the rival English language Montreal Gazette since that time.

The Star, the leading English language daily in Montreal with a circulation of about 170,000 prior to the strike, has been unable to get its circulation up much beyond 100,000. The Gazette, number two in the market before the strike, has been selling between 160,000 and 170,000 copies since late last year.

Montreal is the largest city in Quebec and its population is predominately French-speaking with a large English-speaking minority.

Arthur E. Wood, Star publisher, said F. P. and Southam Inc. the owner of the Gazette have agreed, subject to certain conditions, that the Gazette will purchase the Star newspaper assets. F. P. in turn will purchase a one-third interest in the Gazette, he said. Wood added that if the conditions are met the Gazette will be published in the existing Star premises and Star employes will be offered the first chance at any new jobs on the Gazette.

"If economic circumstances permit," Wood said resumption of publication by the Star was a possibility.

It cost the Star $7 million to settle the lengthy strike and since publication resumed, losses were "an additional $10.4 million," Wood said.

The August loss was $2 million and forecasts for the final four months of the year indicated a $6.9 million loss for a 1979 total pre-tax loss of $18.7 million," he stated.

The Star gave no prior notice of the end of publication which occurred with today's 4 p.m. edition. In a brief announcement to the editorial staff, Editor Ray Heard said the paper would make available $15 million to settle severance claims of the paper's 1100 employes.

Both F. P. and Southam operate major news chains in Canada and under their agreements F. P. will have an option to buy one-third of the Gazette's operation "This will allow F. P. continued participation in the market and facilitate the revival of the Star as an editorially independent newspaper should market conditions make that possible in the future," Southam said in a prepared statement.

Despite the agreements between Southam and F. P., "there remains the possibility that a responsible third party may be prepared to revive the Star within the next few months," Southam said. In such circumstances Southam has agreed to waive its option to acquire the Star's assets and to allow a third party to make full use of them.