Owners Chris and Gunna Chown announced the closure of the grade-II listed boutique hotel on their website, saying they will be reverting the property to a private house.
In a statement, the pair said: "Plas Bodegroes restaurant with rooms has now closed down.
"We would like to thank all of our staff, and guests from near and far who have enjoyed our hospitality over the years and made Plas Bodegroes such a unique experience.
"We are reverting the property to a private house. Upon completing the work Plas Bodegroes will be available to let as an entire house."
The Chown's have operated the 18th Century Georgian house as a hotel since 1985.
Plas Bodegroes held a Michelin star from 1991 to 1998, and again from 2001 to 2008.
In November 2018 it was reported that the owners had been granted permission to turn it back into a private residence.
It came after chef Chris Chown failed to find a buyer for the property, having said it was no longer viable due to online competition driving down prices.
Auctioneers Christie's tried to sell the hotel for £1.5m in 2015, but got no takers.
As well as holding a Michelin star on two occasions, the restaurant also won the Good Food Guide UK Restaurant of the Year in 2003.