St Kilda's notorious Gatwick Hotel rooming house will be closed, bringing to an end months of uncertainty about its future.

For decades the rooming house has served as a place of last resort for people on the edge of sleeping rough. But its critics, including many local traders, have denounced the rooming house as a magnet for violent crime.

On Monday, Housing Minister Martin Foley said some residents had been allocated new homes while others will receive a notice to vacate.

"The Gatwick has long passed its time as a place that housed vulnerable people in safe and appropriate circumstances," he said.