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The Otago University branch of the ANZ bank at the corner of Cumberland and Albany Sts will shut its doors for good on August 7.
ANZ said all staff working at the branch had been offered roles elsewhere in the company.
"Our Otago University branch staff will tell our customers about the closure over the coming weeks," ANZ said in a written statement.
Customers needing an ANZ branch would have to go to the bank on the corner of George St and Moray Pl.
There would continue to be an ATM at the Otago University branch.
"In recent years customers have been steadily moving their banking online," the bank said.
It said the average ANZ customer used mobile banking up to twice a day and visited a branch twice a year.
The Otago University ANZ had seen in-branch transactions drop 40% since the same time last year.
"This is in line with what’s happening in nearly every market with a developed banking system worldwide," ANZ said.
"Covid-19 has dramatically hastened this process. As customers were advised to stay home, many of those who had not already done so started banking online."
Nationally, branch transactions dropped 30% compared to pre-Covid-19 levels "and the numbers show no sign of returning to previous levels", the bank said.
"Over-the-counter transactions at branches have decreased 55% since 2015, while customer payments via internet banking and our mobile banking app ANZ goMoney have increased 8000%."
The new demand for online banking has led ANZ to redeploy many of its branch staff to help customers using the different ways of banking.
In November last year ANZ also shut its branch at 300 George St, leaving an ATM that accepts cash and cheque deposits.
Last week ASB announced it would close its Mosgiel branch and reduce the hours of its Queenstown site.