Theatre staff are facing redundancy because social-distanced shows are not viable, bosses have admitted.
The Royal and Derngate in Northampton has reluctantly made the announcement because of the coronavirus pandemic.
It has been losing £1m a month since closing on 18 March and the decision follows a day of action to highlight the crisis facing UK live events.
Chief executive Jo Gordon said: "We know this news will come as a disappointment for many.
" The Royal and Derngate also runs the Northampton Filmhouse, which remains closed despite the government allowing cinemas to re-open.
The locally-produced Christmas show, which traditionally runs at the Royal Theatre, has also been cancelled.
'Impossible position' Ms Gordon said the theatre, a registered charity, had to "focus now on reimagining our business model" which included entering redundancy consultations with a number of employees.
"It is devastating that we currently have no other choice in order to try and protect the long-term future of Royal & Derngate for Northamptonshire," she added.
The theatre had used the government's furlough scheme, emergency funding from the Arts Council, run a fundraising campaign and held a series of drive-in movie screenings at Delapre Abbey in Northampton.
But Artistic Director James Dacre said the closure had put it in "an impossible position".
He said it would look at putting on "smaller scale events and activities this Christmas, where possible within government guidelines".
The theatre said it will also apply for funding from the a £1.
57bn support package announced by the government aimed at protecting theatres, galleries and museums.