Michelin-starred SY23 in Aberystwyth is to close permanently on 23 December due to the "unprecedented challenges of the current financial climate".
Owners Mark and Rhian Phillips said in a statement that they would continue their court battle against the insurance companies that are yet to accept liability for the restaurant's business interruption claim during Covid.
Earlier this week, Nathan Davies said he would step down as head chef of SY23, describing the role as the "biggest highlight of my career."
Following the announcement, Mark and Rhian Phillips said: “We regret to inform you that after much consideration, we have found it necessary to cease operations on Saturday, 23 December 2023."
The pair added: “We extended the opportunity to Nathan, our esteemed head chef, and Hollie to take on the business, but unfortunately, they have chosen not to accept the offer at this time.
“Since our opening in late 2019, the restaurant industry has faced extraordinary difficulties, and Rhian and I have made sacrifices that have been greater than most people can imagine."
They said the closure would not impact the battle against their insurance companies.
“If anything, our situation today only strengthens the importance of this case, and the responsibility that the insurance companies have to small businesses," the pair said.
"Our case will be heard in the High Court of Appeal, during June 2024. This will enable other businesses, not only in hospitality, to pursue their claims."
SY23 opened in 2019 and was awarded a Michelin star in 2022. Davies had led the brigade since it opened.