Bar Roma in Queensferry Street had been approached by pub chain Wetherspoon’s, but it is understood those talks have stalled.
Owner Mario Cugini said he and his wife Bibi wanted to retire and had no-one to take on the business, which has been in the city’s West End since 1981.
He said: “The restaurant has not been sold and there is no-one to take over. Yes, it will close at the end of August.”
It appears that potential buyers have not met the asking price. An agent has been appointed but there are not thought to be any other interested parties.
Some staff have already left and the remaining 25 still without other jobs will be made redundant when the restaurant shuts.
Rumours of its closure have been circulating since February and the news will disappoint thousands of regulars and visitors.
Over the years, Bar Roma has been the choice of a number of television and sports stars. Heart of Midlothian Football Club has been among those to hold functions at the restaurant.
Speculation about its closure coincided with the death of a popular waiter. Twenty-five-year-old Dante D’Onofrio died of a rare medical condition.
He had been well known for entertaining diners with his singing and dancing. His death prompted more than 2,500 tributes to Bar Roma’s Facebook page.