The South Yorkshire Trading Standards Unit is to close on 31 July over a £14m shortfall in its accounts.
The £14m shortfall at the unit has built up over the past 10 years
The discrepancy came to light after the death of the unit's general manager in December 2005 and is being investigated by the Serious Fraud Office.
The unit operates separately from local council trading standards offices and is run by a joint committee.
It said it was not possible to sell the unit as a going concern and it would try to redeploy the 24 staff elsewhere.
The South Yorkshire Trading Standards Unit (SYTSU) calibrates measures for private businesses and local authorities.
After the death of its general manager, Mike Buckley, in December a routine internal audit found the unit's accounts did not reflect its true finances.
Mr Buckley had managed the unit in Chapeltown, Sheffield, for 30 years.
Its assets will now be sold off individually.
The missing money will be covered by the four local authorities, in Sheffield, Barnsley, Doncaster and Rotherham, on the basis of population.
Sheffield City Council's chief executive Bob Kerslake said the councils would also continue the statutory services provided by the unit.
"This has been a very difficult time for all concerned, especially the staff at the unit," he said.
"The closure of the unit has been the most likely outcome for some time, but we have explored every option before reaching such a decision."