A statement from The WB:
For the last seven years Angel and Buffy the Vampire Slayer have been cornerstones of our network. The sum total of the work done on those shows has produced some of the proudest moments in our history. Like some of the great series that are leaving the air this year, including Frasier and Friends, the cast, crew, writers and producers of Angel deserve to be able to wrap up the series in a way befitting a classic television series and that is why we went to Joss to let him know that this would be the last year of the series on The WB. We have discussed continuing the Angel legacy with special movie events next year, which is still on the table. In a perfect world, all of these details would be completed before this information went to the press so that we could be definitive about the show's ongoing future. But in any case, we did not want to contemplate this being the last year of Angel without giving the show the option of crafting their own destiny for this character and for this series. David Boreanaz continues to be one of the finest, classiest and friendliest actors we have had the pleasure to work with and we hope that the relationship furthers from here. The same can be said for all the actors and producers on the show.
TheWB.com - Press Release

Damnit.