Swedish engineering firm Svensk Sjoentreprenad has been contracted to carry out the dismantling work, which is expected to be completed by 1 January 2016.
The 14-year old Swedish offshore project uses five 2MW Neg Micon turbines although only one turbine was in operation when the decision to dismantle the project was taken in September 2014.
The limited availability of the NEG Micon turbines meant spare parts were hard to come by.
The Swedish utility decided against installing new turbines as the project's export cable would need replacing if it was to continue operating. Decommissioning has been deemed the most economical option.
The turbines, towers, blades and cables will be dismantled and sold or recycled. The monopile foundations will be cut down to seabed level. The site will be restored to its original condition, said the utility.
Yttre Stengrund was Sweden's second offshore wind project, going online in 2001.
Vattenfall acquired the project in 2006 from Dong Energy, according to Windpower Intelligence, the research and data division of Windpower Monthly.