The Theatr will be replaced in four to five years
The curtain is due to fall on the company which has been staging productions at Theatr Gwynedd in Bangor for the last 30 years.
It was hoped that Theatre Gwynedd Ltd would carry on putting on productions in other venues after the theatre building in the city closed.
But the theatre's board has confirmed that when the building closes, so will the Theatre Gwynedd brand.
Unite the union described the decision as "disappointing".
It said it would leave Bangor without a theatre facility.
The closure of the theatre and the Theatr Gwynedd brand in October will leave the city without a theatre facility and 12 people will lose their jobs.
Last year building-owners, Bangor University, said the theatre was to close, but the Theatr Gwynedd brand would carry on.
Janet Roberts, chairman of the Theatr Gwynedd management board said blamed the "difficult economic environment and increased financial pressures on local government, and the arts in general", for the decision.
"The board has decided, after detailed and serious discussion, that the only option was to bring the Theatr's activities to an end," she said.
The closure would be a "sad day" for all those involved in the theatre, she added.
Theatr Gwynedd director Dafydd Thomas said he would like to thank the staff, who will all be losing their jobs, for their "dedication and loyalty".
"I hope that theatre in the city of Bangor and surrounding area will flourish in the future," he said.
"I also hope that the exciting plans being discussed by Bangor University to create a high quality arts centre in the city will bear fruit," he added.
John Hamilton of the Unite union said the redundancies would take effect in October involving more than 20 staff, 12 of them full-time.
"We're very disappointed," he said.
"There will be no theatre community service for the Bangor area and that was always one of our main concerns.
"The theatre has provided an excellent service particularly in the Welsh language," he added.