The iconic Dapto Dogs will cease operating immediately after a breakdown in negotiations between Greyhound Racing NSW and the Dapto Agricultural & Horticultural Society.
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The society's racing registration expired last Thursday.
In a statement, the society said Greyhound Racing NSW had presented them with non-negotiable terms that would put their community development plans at risk, as well as its current tenancy commitments.
About 15 people are employed casually with Dapto Dogs; the society said they would immediately take steps to support staff and identify redeployment opportunities.
Dapto Agricultural & Horticultural Society chairperson Noel Leslie said they made the announcement with a "heavy heart".
"The community has entrusted us with doing the right thing with their land and their assets ... and sustaining an activity at the expense of developing new community infrastructure is a decision that can't be justified," Mr Leslie said.
Read more: Racing ban sends shock waves through Dapto
"Locking us into a non-negotiable three-year term forced us into an unwinnable and financially damaging situation without the certainty of our regular Thursday night timeslot and we have no alternative but to cease greyhound racing.
"Dapto is a rapidly growing community and there is a great need to build recreational facilities for families and children.
He said they had a progressive strategic plan and vision for the grounds.
"Our plans and goals include building both indoor and outdoor recreation, outdoor children's playground, cafes, restaurants and a multi-purpose hall.
"We have a heavy heart that this iconic greyhound track has closed, but the board has an obligation to act in the best interests of the society and the community. We are looking at delivering new opportunities for our community and the generations to come," he said.
Greyhound Racing NSW has been contacted for comment and is expected to release a statement later on Wednesday.
More to come