Troubled West Bromwich arts centre The Public set to close in November, it has been announced.
Sandwell Council has told Sandwell Arts Trust - the - that it cannot afford to keep it running in its present form.
In a statement, the council said: "The council is currently in talks to secure a long-term, financially viable future for The Public, and these are continuing.
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"On Wednesday, the cabinet of senior councillors is recommended not to take up the option of extending the council's current agreement with Sandwell Arts Trust. The council cannot afford to keep The Public running in its current form.
"Sandwell Arts Trust was informed of this yesterday (Thursday) and is set to hand the building back to the council on November 30."
Sandwell Council leader Coun Darren Cooper said: “We rescued The Public after the project went into administration some years ago, setting up Sandwell Arts Trust to make sure the building was finished and to run activities there.
“The arts trust has done a great job and has contributed to the regeneration of West Bromwich.
"It’s not been an easy decision to make. But the fact of the matter is the council can’t continue to subsidise The Public. The overall cost to the council is currently about £30,000 a week. That’s nearly £1.6 million a year.
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“That money is council taxpayers’ money. In the face of the cuts the council is facing from central government, this can’t carry on."
Coun Cooper added: “I know the building means a lot to many people – not just those who work there, but the people who enjoy the arts activities, the gigs, the café and the exhibitions.
"It has made a significant difference to many people’s lives – including bringing work experience opportunities to West Bromwich and promoting the town."
"We are talking to businesses and groups that use the building to make sure their work and activities continue in the town centre."
Coun Cooper said that the council was continuing to use it as a sixth form and lifelong learning centre with some arts provision as well.
The Public, which opened five years ago, has been dubbed The Pink Elephant because of its lurid colour and design.
Building costs were , including £29 million from Arts Council England, and £17 million from Sandwell Council, which has been paying towards the running costs.