It is kind of the "to" in "to read newspaper", and kind of not.
Zeitungen zu lesen ist sein Hobby = To read newspapers is his hobby.
It sort of turns the verb into a noun. What he is stopping is this action "to read newspapers".
You could also read it as a gerund, since that acts like a noun as well: Reading newspapers is his hobby; he stops reading newspapers.
Sometimes this "verb as noun" uses zu in German and sometimes not -- I'm not sure of the rules surrounding this I'm afraid. But when it's present, it's a bit similar to the "to" which is sometimes used in similar circumstances in English.