The Devon-based venue is operated by Rekom UK, the UK’s largest nightclub operator. It is the city’s largest club.
The venue in Barbican Leisure Park will go out with a bang with a closing New Year’s Eve party on 31 December.
Speaking to The Morning Advertiser, Russell Quelch, Rekom’s UK executive country director, said: “Following landlord negotiations we have been unable to reach an agreement that allows us to manage a long-term sustainable business in the current location.
“Unfortunately, as the town has developed the location has become further and further away from the city late night circuit.
“Along with the current cost of living guest simple don't want to spend their hard-earned money moving between drinking circuits on a nighttime [basis].”
Venues like Plymouth PRYZM rely on students, especially in a destination location within the vicinity of the university and the student market, he added.
Rekom is working with landlords, marketing strategies and universities, and is also amending its trading model for the current trading environment to protect its other nightclubs from closure.
“We are seeing less students go out early week, choosing the weekend and we have been focusing on our weekend offering,” said Quelch.
Rekom UK chairman Peter Marks recently told The Morning Advertiser he was more cautious about business than he’d been for a while, with more than a third of Brits cutting back the amount they went on nights out.
Rekom will make sure the current staff at Plymouth Pryzm are offered the right package in line with government guidelines, clear timelines and any vacancies within the rest of the group, should they wish to stay with the company.
The operator does not currently have plans to open elsewhere in Plymouth. However, Quelch said the operator’s plan is to open venues in the 'nightpulse' locations of cities, and Plymouth fits into this strategy.
“We always look at opportunities as they arise and make decisions based on location, size and layout to ensure we have the right concept in the right location,” he added.