St Andrews will lose its main Post Office from next June after a deal was reached with newsagent WH Smith.
Campaigners had been fighting to keep the post office open
There had been a long-running campaign to retain the facility, on South Street, after a consultation began on plans to move services into the store.
A petition was signed by 15,000 residents and the local MSP Iain Smith met officials to voice his concerns.
However, the Post Office has now confirmed that following the statutory consultation, the move will go ahead.
The Post Office has insisted that the decision will not result in a reduction in services.
Spokesman Andy Bayfield said: "WH Smith has shown throughout the consultation period that it is wholly committed to providing the excellent face-to-face service that Post Office customers expect and deserve.
"At a time when Post Office Ltd is losing £4m a week, partnerships such as these enable us to go on offering Post Office services in the heart of the town.
"Without them, we simply cannot safeguard high street branches or the services they provide."
Some local people believe many issues have not been addressed by the consultation, including concerns about overcrowding at busy times.
Cllr Robin Waterston, form the Liberal Democrats, told the BBC Scotland news website: "I am very disappointed by this news.
"It's the worst possible Christmas present for the people of St Andrews, students and visitors who will all suffer the consequences of this decision."