St Kilda's iconic Greyhound Hotel - a more than 160-year-old venue that morphed into a centre for drag-queen culture - has closed its doors for the last time.

The pub near the corner of St Kilda Road and Carlisle Street had been earmarked for demolition to make way for new apartments, but campaigners hoped to save it.

The Greyhound Hotel before demolition. Credit:Google Maps

In a statement to Fairfax Media on Friday, hotel management said the closure was due to recent developments outside the owners' control that had left the business insolvent.

"Despite recent headlines regarding the development potential of the GH hotel site, this is not the reason for the closure. Keeping the GH hotel open for the community has always been the priority of the owners. Unfortunately this is now no longer a viable option," the statement read.