This news does sound a bit surprising, especially considering Google has been working on this project for a long time. Project Tango is basically meant to deliver a much better-augmented reality experience on smartphones with the help of a number of extra hardware, allowing the device to look at three dimensions while realizing the positional tracking technology.
But Apple proves that the overall positional tracking and AR experience can be well presented only through the software, via the ARKit API launched simultaneously with iOS 11. Google also actually agrees; they announced their own version called ARCore in August.
What can be presented by Tango - with the exception of 3D viewing ability - can actually be solved by ARCore without needing to involve extra hardware. That's why ARCore is judged to have a brighter future, and Google has decided to shift the effort previously deployed for Tango to ARCore in full.
So far ARCore is still not widely released but in the form of Developer Preview. The only smartphone that can enjoy the benefits that brought ARCore before the Google Pixel line and consumers can feel it directly through the application of AR Stickers released recently.
Tango basically will not disappear without a trace. Technology-technology will still be used and developed, but the 'outer shell' is now ARCore, and consumers need only wait for manufacturers to release ARCore support for their homemade devices. Google itself promises ARCore could reach at least 100 million users when released in the coming months.
