Otago Playcentre Association centre adviser Alan Somerville said it had been "an absolutely thriving centre in the past", but with only three children using it this year, it had become unsustainable.
About 30 children were part of the centre in 2008, and about 15 in 2010, but there were "nowhere near enough" now.
"All centres have a natural up and down, and we are just in a real down at the moment," he said.
The centre, based in Fairfield, had been receiving extra support from the association to remain open and a campaign to attract new members had begun.
The centre ran two mornings a week, though others in Dunedin ran five, and was the only playcentre in the Fairfield, Abbotsford and Green Island area.
"We are really looking for more families who would like to come in here and make this their own," Mr Somerville said.
The advantages of the playcentre model was it allowed parents to be directly involved in their children's early childhood education as they managed the centre, set the curriculum and had training opportunities, he said.
