All staff at Lincoln Drill Hall will be made redundant at the end of October, resulting in around 19 job losses.
The venue has been closed since lockdown began in March and wasn’t planning on reopening until spring 2021 at the earliest.
City of Lincoln Council leaders scrapped in August the annual grant given to the venue on Free School Lane, which is run by Lincoln Arts Trust Ltd.
They wouldn’t renew the grant because the business was deemed unviable, leaving the arts centre on the verge of closure.
Council funding for the venue had been gradually reduced each year since 2013 when the grant peaked at £277,000 per year.
Since then, reductions of around £10,000-£15,000 per year have been made, resulting in a payment of around £94,000 for September 2020.
A big factor in the withdrawal of funding came from the central government’s announcement that City of Lincoln Council must make cuts of around £1-£1.5 million to balance its already stretched budget.
Philip Hamlyn-Williams, the chair of the trustees at Lincoln Arts Trust, told BBC Radio Lincolnshire: “The staff really have gone so far beyond the call of the duty, they all have, and so it is so desperately sad to have to do this.”
The trustees say a new use is being sought for the building.
A £31 million wish list of 14 projects hoping to attract around £25 million in government funding was revealed this summer.
£415,000 was asked for the Drill Hall so that the “key cultural asset” could be renovated and repurposed to provide training and services, as well as its programme of arts and performance.