The unit manufactured custom-made and standard laboratory glassware as well as performing repairs.
It serviced the glassblowing requirements of research and teaching laboratories in the divisions of sciences, health sciences and humanities.
Long-time University of Otago chemistry researcher and Mellor Professor Lyall Hanton said he was sad to see the unit go.
He said glassblowing staff were "a rare breed" and replacing the unit’s ageing staff would be difficult, if not impossible.
Prof Hanton said award-winning scientific glassblower John Wells had been in the profession for about 50 years and was due to retire.
"Even if you wanted to, where would you find another like him?"
Prof Hanton said the closure meant there were some custom-made objects he may no longer have access to, and it would require a "work around".
He believed the university would have access to a Dunedin-based glassblower for more complicated custom-made glassware.
One of the more unusual pieces of glassware created by the unit was by glassblower Anne Ryan in 2009, when she created a glass shell for a hermit crab at the New Zealand Marine Studies Centre and Aquarium at Portobello.
It helped staff see what the crabs did inside the shell and learn the answers to often-asked questions, such as how do the crabs manage to squeeze into such a small space?
The unit also contained a comprehensive retail store of commercially produced laboratory glassware.
It sat within the division of sciences and employed two experienced scientific glassblowers, with a third glassblower having a workshop in the chemistry department.
Not all of the roles were full time.
University of Otago sciences division Pro-Vice-Chancellor Professor Richard Barker said the glassblowing unit had been operating since 1954 and was closed last Friday.
"Like all universities, we are currently facing financial challenges.
"In this case, the unit operates at a deficit, so it is no longer viable to continue this activity when there are external suppliers able to provide a cost-effective service."
Prof Barker said he was "very sorry and sad" that the university was not able to continue to provide employment to the unit’s staff who had provided such a valuable service over a long period of time.
