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Queenstown's sole brothel will close when its lease expires on December 10.
Manageress Sarah Le Prou is reported to be shutting Candy's Gentlemen's Club and moving to Christchurch, where she plans to build a $5 million massage parlour.
In July, the Queenstown Lakes District Council undertook to review its Brothel Control Bylaw, which was enacted in 2004.
At the time, councillors commented there was no problem with brothels in Queenstown because there was only the one.
But it was reported by the Mountain Scene yesterday that Ms Le Prou and her partner, Tim Marechal, are relocating because they feel they have been targeted by the council and the police.
The pair hold the resort's only brothel licence, and said they would not pass it on to anyone else.
The bylaw says brothels can operate only inside the central business district.
They are not allowed within 100m of residential homes, schools or pre-schools, churches, community facilities or reserves, and they cannot be within 75m of another brothel.
The proposed changes to the bylaw included a prohibition on advertising and soliciting sexual services in the district.
Candy's is understood to employ three women and visiting sex workers.