The eight residents range in age from 76 to 100 and are likely to be transferred to several other rest-homes, possibly as far afield as Invercargill, before the South Dunedin home closes on November 28.
"The decision was not taken lightly. It is something we have been considering. The number of sisters has reduced considerably since the start of the year," McAuley Trust operations manager Matthew Murfitt, of Wellington, said.
The McAuley Trust, which administers the home, confirmed to residents and staff on Tuesday it would be deregistered.
The rest-home would be converted to a "community house" for sisters who did not require a high level of care, Mr Murfitt said.
Sister Regis Low, manager of the rest-home since it opened in 1991 and who will be made redundant, said the news came at a difficult time, with five residents and two staff dying in the past few months.
"It has been a hard year. Our annus horribilis. The sisters took this news very hard. They were accepting but are understandably anxious because they know they have to move."
Some of the residents have lived in the home since it opened.
The McAuley House rest-home had operated at a loss for some time, and in order to become viable as a rest-home, the trust needed to invest in major rebuilding, Mr Murfitt said.
However, that investment was beyond the capabilities of the trust.
Staff made redundant would be encouraged to apply for one of the five available positions at the community house.
The trust would work with the Otago District Health Board to assist residents and their fami-lies find suitable homes.
Mr Murfitt said he would be in contact with the Little Sisters of the Poor rest-home, because a Catholic rest-home would "reflect the environment the sisters have been in".
A call by the Otago Daily Times this week revealed there were no vacancies at the Brockville-based rest-home.
The decision to close left the staff at McAuley disappointed.
"We have been hearing rumours for a while," said one staff member, "but it still came out of the blue".
