One of Sydney's best-loved independent theatres is looking for a new home after being forced to relocate due to a rent hike.

Giant Dwarf Theatre, co-founded by comedian Julian Morrow, is moving from its Cleveland Street, Redfern, premises next month due to a 35 per cent rent increase Morrow said was unaffordable.

Exiting stage left: Giant Dwarf Theatre is closing its doors next month.

Morrow said the "for lease" sign out the front was a sad end to a happy era that began when the theatre opened in 2014.

"We are at the end of the road," he said. "We've gone through a few lease negotiations at this venue. The way things have played out isn't exactly a surprise."