The sheepdogs have been affected by the increasing popularity of small, so-called "handbag dogs" such as Chihuahuas and pugs, Kennel Club officials said.
There have been just 316 sheepdog puppy registrations so far this year, and a breed is considered "vulnerable" if registrations drop below 300.
In comparison, there were were 2,669 Chihuahuas and 5,496 Pugs registered.
The decline in the Old English sheepdog is partly due to lifestyle changes, said Bill Lambert, manager of the Kennel Club Assured Breeder Scheme.
"It needs a lot of grooming and exercise and so is not suitable for the fast paced urban lifestyles of many people," he told the BBC.
"But it is also a lot to do with fashion. Despite the fact that Old English sheepdogs have good temperaments and can make fantastic family pets, their popularity is being eclipsed by more fashionable foreign breeds that can be much harder to train and care for."
The sheepdog is one of a number of native breeds that are experiencing declines, including the field spaniel and the sky terrier, the Kennel Club said.