Lam, who opened the restaurant with wife Vanessa after leaving l'Escargot in 1992, said the business was still thriving, but felt it was time to now 'slow down' and move away from the day-to-day running of a restaurant.
"Running a small independent restaurant is so exciting, but it is also so all-encompassing in terms of the time you put in," he said. "When you run a big restaurant you can hand over to others when you want some time off, but not with this. We are not going to stop working, but rather slow the pace a bit, have a holiday and have some time to do some other things, like read books."
Ransome's Dock, referred to as the 'blueprint' for a neighbourhood restaurant, has become renowned for its wine list as much as for its Modern European menu and became 'the canteen' for those in the wine trade due to Lam's growing fascination with wine.
"Twenty-one years ago we said we wanted to create a true neighbourhood restaurant that we'd enjoy going to. We wanted to be serious about what we did, but create a relaxed, family-friendly restaurant and I think we've achieved that," said Lam.
Lam, who was head chef at Le Caprice before going on to launch l'Escargot with Nick Lander and Elena Salvoni, said he had been overwhelmed by goodwill messages from customers and members of the hospitality and wine trades when he announced his decision to close.
"The response from customers and people in the business has been amazing," he said. "We do this job because we want to give something to people, so it's really gratifying to hear that people appreciate what we have done. I had an email from one customer who first knew me when he had a stag party at l'Escargot 21 years ago and he's been coming to Ransome's Dock ever since and other customers have said they intend to come back five or six times before we close in four weeks to get their last fix."
The chef said despite his success, running an independent restaurant through the economic downturn and with the growing power of restaurant chains had been tough. However, he said he believed having faithful staff (two members of staff have been with the restaurant since it opened) and sticking to his ethos of serving seasonal, sustainable and simply cooked food had helped it succeed.
"For those starting out with their own restaurants now, I say 'don't compromise and be true to what you do'," he said. "It must be one of the most difficult challenges to be a small independent in London today. The chains have so much power But it's been rather interesting to see some smaller places on short-term leases who are succeeding in what they set out to do."
Ransome's Dock will close on Sunday 11 August. The site has been sold to a bar and restaurant operator who will re-open under a new name in the next few months.