Cessnock Regional Art Gallery will hold its final exhibition, a Christmas Makers Market, from November 26 to December 21.
Members voted at the recent annual general meeting to close down the gallery, after a funding request to Cessnock City Council in August was rejected.
The gallery had sought funding to employ a full-time director and to subsidise its building insurance and land rates in the council-owned building (which it provides rent-free), but the council knocked the request back on the grounds that it was not included in its 2019/20 operational budget.
The gallery's volunteer chairperson Katrina Rose has stepped down from the position, and no-one has come forward to replace her.
Gallery volunteer and Christmas Makers Market curator Susan Myerson said while the lack of support from council was "incomprehensible", she hoped the final exhibition would help local makers to continue to foster relationships with the community.
"The talented artists selling their work at the markets are just a small group of the many talented artisans who live in the Cessnock region," she said.
"The markets will give the community the opportunity to buy directly from the local artists.
"We hope that, despite the gallery closing, people will continue to seek out and support local artists and appreciate the creative and cultural diversity they bring to this community."
The gallery opened in 2008 and has hosted 12-to-14 exhibitions a year - from local school students to national touring exhibitions.
Pokolbin artist Janine Matthews said hope was not lost, and that she and other gallery supporters will be starting a campaign next year to have the gallery re-established.
"The community of Cessnock has recently seen the closure of many businesses in the CBD and now we are to lose a vital community space which is free and very accessible to all," she said.
"In this difficult time of drought and fire the community needs a friendly, open place to gather and meet.
"A gallery is good for public morale and something for the people of Cessnock to be proud of."
Cessnock City Council is investigating the creation of a establishment of a cultural hub at Cessnock Performing Arts Centre, which may include art spaces.
Council's director of corporate and community Robert Maginnity said investigations are progressing well.
"Once the investigation is complete an update will be provided to council that will provide some concepts and indicative costs for required works," Mr Maginnity said.
"It's an exciting opportunity and council looks forward to providing more information to the community as investigations progress."
The gallery's current exhibition, Gathered - featuring sculptures by Nicole de Mestre and Kylie Beynon - will conclude on Saturday.