A pub popular with university students in Melbourne's CBD says it will be forced to close down, because the construction of the city's Metro Tunnel project has driven away its customers.

Key points: The Oxford Scholar is losing between $3,000–5,000 a week, operators say

The Oxford Scholar is losing between $3,000–5,000 a week, operators say Metro Tunnel says the pub was offered signage, an upgrade to air filters and promotion

Metro Tunnel says the pub was offered signage, an upgrade to air filters and promotion The pub owner is considering "all avenues" of recourse

The operators of the Oxford Scholar, opposite RMIT University on the corner of Swanston and A'Beckett streets, said customers were no longer frequenting the bar while works for the $11 billion tunnel project continued.

A new station, CBD North, is being built nearby.

Oxford Scholar manager Adam D'Aprano said the venue was losing between $3,000–5,000 a week because of the ongoing work.

Pub operators said construction barriers meant it was hidden to potential customers. ( ABC News: Elias Clure )

"We've lost our outdoor area due to the construction work. That's had a big impact on our business," he said.

"Since they've extended barriers out to Swanston Street we're pretty much hidden. You walk past coming down from La Trobe Street and you don't really see us here.

"We're losing money out of it, so it's not financially viable for us to keep going at the moment."

The Melbourne Metro Rail Authority said the pub had been given support during building works.

"[The Authority] supported the hotel by limiting the time of works in the area, signage, filling windows, upgrading air filters, moving services and assisting [to] promote the business," authority spokesman Reid Sexton said.

"While a project of this size will cause some unavoidable local disruption while it's being built, ultimately the Metro Tunnel will deliver benefits for this area and for Melbourne more broadly."

The Oxford Scholar says it is losing up to $5,000 in revenue per week due to construction. ( Facebook: The Oxford Scholar )

Transport Minister Jacinta Allan said the authority had worked with the pub since 2015.

"The approach that the Metro Tunnel is taking is to work on a business-by-business basis, because each business has different needs," she said.

"At the end of all that process, the business has made its own decision and its own choice. But we will continue to work with businesses on that case-by-case basis."

But Mr D'Aprano said the authority's help came too late, and the pub's owner was considering "all avenues" of recourse over the closure.

"It's been part of an institution here with RMIT for many years and it's sad for it to be going."

The project includes five underground railway stations between South Kensington and South Yarra. ( Supplied: Melbourne Metro Rail Authority )

Opposition spokesman David Hodgett said the Government should give the pub compensation.

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"I think the Government owes it some assistance or some support when major construction works are affecting its trade," he said.

"Construction works are going to be of benefit to Melbourne and Victoria in the long run … but the Government should be working with local businesses and small businesses to provide them assistance or support during construction works.

"You don't want businesses going broke during that construction period."

The Metro Tunnel project will see five new train stations built between South Kensington and South Yarra to help ease congestion on public transport in the city.

It is due for completion in 2026 and preliminary work has also already started along St Kilda Road.

Drivers have been warned to add an additional 30 minutes to travel times if travelling near the Domain intersection.