Joy Division's Peter Hook said Jilly's was an institution
Two of Manchester's best-known clubs, Jilly's Rockworld and the Music Box, have closed.
Jilly's, which was formerly known as Fagin's, opened in 1970 and saw early performances by Joy Division and Depeche Mode.
The club's owner John Bagnall said financial reasons were behind the closure. "It's very sad. It's heartbreaking," he said.
New Order and Joy Division's Peter Hook said it was a big part of the city.
Mr Bagnall said: "The numbers are, over the last two or three years, 50% down and we can't pay the bills any longer, the money's run out."
The owner said he thought the 24-hour drinking laws had affected the number of people going to the club, as people no longer left pubs or bars to go on to a live music venue where they needed to pay to get in.
The Oxford Road building housed Jilly's Rockworld upstairs, a 1,300 capacity rock venue, and the Music Box downstairs.
Hook, who co-founded Joy Division, said the Music Box, which used to be called Rafters, was a "fantastic venue" and said: "It's one of the saddest things in the world when these institutions close."
"I always think that corridor in Oxford Road played a great part in giving Manchester its identity and its vibrancy."