City of Newcastle has told popular Stockton cafe Lexie's on the Beach it is no longer able to operate out of its council-owned premises due to the ongoing erosion crisis.
The council had forced the closure of the cafe last Thursday, saying it could "no longer guarantee public safety" at the beachside venue.
Lexie's on the Beach manager Vinny Sovechles had hoped it would only be a temporary measure and the cafe would reopen on Monday.
"We've had to close, we'll get through the swell this weekend and then hopefully go back to normal," he told the Newcastle Herald on Friday.
However, that did not occur and council staff informed the Sovechles family the cafe could not be reopened on Tuesday morning.
Mr Sovechles has informed about 25 staff members they no longer have a job.
City of Newcastle said the decision had been made "following advice from coastal engineers", which suggested the building was within "a hazardous zone of wave impact" and "at immediate risk of significant damage or failure in a one-in-two-year storm event".
"According to the coastal engineers' advice, the erosion impact on the building has created an imminent risk to public safety and, as a result, the building cannot be occupied," City of Newcastle infrastructure and property director Ken Liddell said.
"We understand the direct impact this will have for the operators of the café, staff and its patrons as Lexie's is a much-loved and valuable part of the community.
"We will be working closely with the business owner to transition out of the premises to make this difficult process as smooth as possible.
"The erosion of Stockton Beach has been recognised as a natural disaster and the city must keep public safety a priority as the ongoing issues are managed and we work with the NSW government on sustainable long-term solutions."
The closure comes on the same morning NSW Opposition leader Jodi McKay visited Stockton beach.
Ms McKay pledged Labor's "unconditional support" for the Berejeklian government to approve offshore sand dredging as a "permanent solution" to erosion woes.
She addressed a crowd of about 80 people who turned up to hear her and Newcastle MP Tim Crakanthorp speak outside the cafe.
The two MPs said they were devastated by the shutting of Lexi's.
"We lost the child care centre, you've had roads gone,we have the surf club at risk, caravan park cabins moved and now Lexie's closed," Mr Crakanthorp said.
"What more will it take to get this government to sit up and take notice?"
Ms McKay aknowledged that other parts of the coast - notably Collaroy at the southern end of Narrabeen beach in Sydney - were facing similar conditions.
But she said the government was missing in action on Stockton and was refusing to say why it would not support offshore dredging for sand replenishment.
Mr Crakanthorp said despite questions on notice and other enquires the government would not say whether legislative change was needed to allow the Gold Coast style sand replenishment dredging that would fix Stockton's problem.