The latest incarnation of the long-time bookshop, located on Alinga Street in the Melbourne Building, was relaunched in April, 2013 as more of a performance venue.

Smith's is set to close at midnight on Saturday, even though the venue has gigs and events booked up until at least March 28th according to its website.

Owner Domenic Mico said recent public service cuts had stopped his patrons spending.

"Since the Abbott government cut all its public servants, [business] has been dropping, dropping and dropping until it has reached a point I said ah well that's it," he said.

He said the venue's financial problems had not popped up overnight and they had "persevered as long as possible in the current climate".

"We have been able to maintain things for quite a long time but we can't do it any longer. The money has just run out I just didn't have deep enough pockets," Mr Mico said.

Mr Mico had a grave analysis for the ACT economy in the wake of his business's closure.

"Canberra is going through a major recession it doesn't matter what the pollies say, you work around Civic on Sundays and it's like walking through a cemetery," he said.

Mr Mico and staff sent out a message to patrons and past performers on Wednesday night, thanking them for their support over the years.

"We would like to thank all of our supporters, it has been especially memorable meeting you and for our performers, having you play at our venue - you are all amazing people," the message said.