Co-owner Rick Pettit told the Queenstown Times he and fellow owner Wayne McKeague were not "shutting" the pub, but were evicting its tenants, who had been unable to pay the rent.
"We don't really have a lot of choice.
"We have two tenants in there and neither of them have managed to pay the rent.
"We're not going to go through that again," he said.
The current tenants' lease expires at the end of this month, at which time the tavern would cease to trade, at least for the time being.
"It's a shame because we'd be very happy for it to remain open as a pub . . . but no-one's expressed an interest in going in there," he said.
Mr Pettit and Mr McKeague bought the tavern and the attached apartment about four years ago when it was last on the market.
There were plans to straighten the road the tavern is on, realigning it from the McChesney bridge and through the tavern's site, Mr Pettit said.
The pair originally suggested the council buy the tavern, but at the time there was no money available, so Mr Pettit and Mr McKeague bought it themselves.
Mr Pettit said he understood there had since been approval to realign the road, which could ultimately mean the end of the tavern.
The men were considering lodging resource consent to build opposite the existing tavern to create a "community focal point" which would include cafes.
"The pub is past its use-by date. It's a bit long in the tooth now. It's been through many forms - there's a picture of the pub in the pub when it was a flat-faced stucco deco building in the 1930s and there are photos going back to the 1800s."
A sign on the door of the tavern states the pub was established in 1882.
Arthurs Point resident Alan Davis said it had always been "like the backbone" of the community.
He summed up the news with one word - "Bugger".
"It will be missed because there's a steady core of locals that do frequent the place.
"There would be a good couple of dozen hard-core locals that like to drop in at the old bar on the way home and quite a few locals used to go and take advantage of the bistro.
"It's always been treated as the local lounge. You didn't have to dress up. You could have a drink, meet a friend, have a feed if you wanted it."
The tavern had seen many owners in its years - it was thought to be one of the oldest licensed premises in the South Island - but began to suffer when it lost its off licence, Mr Davis said.
Tenant Kristy Harris said she was unable to comment when contacted yesterday.
