Blarney Hotel has informed its staff that the establishment is now very unlikely to be reopening under the current owners.
The news was broken in a series of meetings held with different staff groups at the hotel on Thursday.
Temporary layoff of hotel workers and leisure centre workers is being extended for another month until the end of March.
Approximately 60 workers are affected by temporary layoffs.
The adjoining golf course is not affected by the decision.
It is understood that attempts are currently underway to sell the facility with a number of buyers expressing interest.
Speaking to The Echo, Independent Councillor Ken O’Flynn said a move to close the Hotel would affect a lot more people than just the workers.
“There are people living in long terms rental arrangements in the chalets around the complex. These are mostly people on HAP or rent allowance. They cannot be discommoded.” Mr O’Flynn called on City Hall to buy the establishment along with a housing body in a move similar to the purchase of Leeside Apartments last year.
“The council needs to step up,” Mr O’Flynn said.