Council officials have refused to step in and rescue the Robin Hood attraction in Nottingham.
The Tales of Robin Hood is closing down due to poor sales and will officially go into voluntary liquidation on 6 February with the loss of 50 jobs.
Executives at the attraction had called on the local authority to buy its assets and run it as a charity.
But the council said it could not commit taxpayers money to "directly support this privately owned business".
A council statement said: "It is sad for Nottingham to lose any visitor attraction dedicated to Robin Hood and the city council is sorry that The Tales of Robin Hood has closed."
A week of crisis talks failed to find a new financial backer for the attraction which hosts banquets and displays about Robin Hood.
Chief executive Ian Walker had said he hoped it could be run as a charity with the help of the city council.
The Tales of Robin Hood is the only attraction in Nottingham dedicated to the world-famous folk hero and brings an estimated £2m to the city each year.