Consent has been granted for an early learning centre to be built on the site.
Richard Michael has owned the Commercial Tavern business at 237 Main South Rd since 1996.
Mr Michael said an 18-year lease on the building would end in August.
He was surprised to learn late last year about the landlord’s plans for the building.
The early learning centre plan is a change of direction for the site.
"I was quite looking forward to all that," he said.
It was going to include a new bar, restaurant, bottle store, and other retail shops. Upstairs plans included either apartments or motel accommodation.
But in August, the Dunedin City Council granted resource consent to an application to demolish the hotel and liquor store and build an early learning centre there.
The consent approved a centre to have 90 children and 19 full-time staff.
"I think he has probably decided he can get a better return through doing something else," Mr Michael said.
The site belongs to Auckland businessman Gary Dell and his wife, Helen, under the company name The Bargain Butcher Ltd.
Attempts to contact Mr Dell yesterday for comment were not successful.
Mr Michael said the end of the lease would mean the end of his business.
The tavern employed three full-time staff and five part-time staff.
"It’s been a meeting place for 150-odd years.
"We have served generations of Green Islanders."
The land was given to an Otago founding settler, Barbara Shand, in 1866, he said.
The original hotel was built on the other side of the car park.
Mr Michael said he had been in discussions with a possible buyer for his business.
"What they want to do with the licence is up to them ..."
Mr Michael had owned the business with a partner until about nine years ago, he said.
He then took it over completely with wife, Lise Humphreys.
The Super Liquor store attached to the Commercial Tavern site will close and reopen under a new off-licence at the former Westpac bank building, at 212 Main South Rd, Green Island, next month.
The new franchise’s managing director is Mr Michael’s daughter, Sam Brabant-Gazeley.
Ms Brabant-Gazeley, who formerly managed the Commercial, said the decision to relocate Super Liquor in Green Island came before they knew about the plans for an early learning centre.
"It was the lockdown that gave me the final push to want me to expand and go further with the Super Liquor franchise," she said.
The new shop fit-out was almost complete.
"This is one of the last tradie pubs [in Dunedin]," Mr Michael said.
The business operated a bar, TAB, gaming room, bottle store and restaurant.
Funds raised by the tavern’s gaming machines were distributed to the Green Island community by the Bendigo Valley Sports and Charity Foundation.
Hundreds of thousands of gaming dollars had been generated for the community, he said.
"It impacts on schools, kindergartens, playgroups, sports clubs, all sorts of endeavours, hospices, playgrounds."
Bendigo foundation manager Mike Brosnan said the tavern’s closure would be the end of gaming machines for Green Island, which would be "tragic" for the community.
"It’s very important to the community that they have access to funding."
He hoped if someone bought the business, the machines could be transferred to another location in the area.
