City council has voted to permanently close the Coliseum, the former home of the Edmonton Oilers, which likely means the 40-year-old building will be demolished.

"I think we've all been bracing ourselves for the possibly for some months that this could lead to demolition," Mayor Don Iveson said Friday following the vote at a council meeting. "I think it's a notch closer to inevitable today."

Last December, a report to council said demolishing the building could cost the city between $15 million and $25 million.

There is no use that I can see for this building and I think it's a matter of facing reality. - Coun. Michael Walters

The building was permanently closed that month.

Friday's vote made it legal and official.

The vote also ends a sponsorship agreement with the Katz Group signed in 2014, which had the city paying the Oilers Entertainment Group $2 million a year.

It was part of the downtown arena deal — the money was in exchange for promotional opportunities.

The decision means the city can save $17 million in payments it doesn't have to give the Katz Group.

Coun. Michael Walters voted in favour of signing the deal but admitted he wasn't always sold on putting the nail in the coffin of the Coliseum.

"I've switched around on this a little bit," Walters said. "One side of me, I was really frustrated to think that we would have to tear down a 40-year-old building but we've done our due diligence.

"There is no use that I can see for this building and I think it's a matter of facing reality and turning that site, possibly down the road, [into] a new community for the city of Edmonton and move on from the Coliseum."

Not all councillors were ready to face that reality on Friday.

Coun. Tony Caterina raised a motion to hold off on signing the deal for a few weeks to see if private developers would come forward with plans to re-purpose the building.

Caterina said he was disappointed with the vote.

"I still believe in my mind that we should have explored this," he said of the options to have a private company to take over the building. "Whether it would take days or months to see if it was viable."

Caterina claims two groups showed interest in re-purposing the building. One is a film production company, which Caterina declined to name to protect the privacy of the group.

The other interested group is related to artificial intelligence, Caterina said.

Other councillors and the mayor think the land should be redeveloped.

Walters and Iveson said they intend to ask city staff for cost estimates to demolish the building.

In February, a city report recommended taking a year to hold consultations to come up with a concept for the future of the Coliseum site.