The Tenants' Union ACT was told on Wednesday that the legal advice resource was selected as the preferred tenderer to deliver a publicly-funded tenants advice service.

It has left the current service "completely devastated". Tenants' Union ACT executive officer Deborah Pippen said she was "more than disappointed".

The union office will be closed for a Christmas break from Friday until January 13. Ms Pippen said plans for what was next would not be determined until staff had returned and the future for its employees was unclear.

The Tenants' Union ACT was told in August it would have to tender for the contract of the service after it had provided legal advice for tenants in the ACT for 25 years.

The Australian Services Union, which represents employees of the Tenants' Union, has lambasted the decision and directed its furor at ACT Attorney-General Gordon Ramsay.

"This is a sad day for Canberra, a sad day for ACT Labor and the Attorney-General should be ashamed," Australian Services Union NSW and ACT secretary Natalie Lang said.

"Mr Ramsay has today engineered the worst possible end to the farcical process he has led. Any effective Tenants' Union needs to be independent so it can fearlessly stand up for the rights of renters without conflict.

"This will be to the great detriment of Canberra tenants."

Mr Ramsay was unavailable for comment on Thursday afternoon but an ACT Justice and Community Directorate spokeswoman responded to questions about the decision.

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"The new service provider will provide an enhanced service model for users of the Tenants Advisory Service, which the panel agreed will provide best value for money and better outcomes for ACT tenants," she said.

The spokeswoman said the "greater level of service" would include an increase in support service capability, extension of hours for the service and a live chat service for users.

Negotiations would begin with Legal Aid ACT in January and these would include discussions about any offers of employment the service could make to existing staff members.

Renters advocacy organisation Better Renting blasted the decision as the "likely" end for the Tenants' Union ACT.

"Let's not sugarcoat this: the ACT government has decided to defund the Tenants' Union ACT on Minister Ramsay's watch," Better Renting executive director Joel Dignam said.

"Their team has brought decades of experience to supporting renters across the ACT. It's tragic and deeply concerning to think that their knowledge will no longer be available to people renting in the ACT."