Sydney's Spice Cellar has shut down

Long-standing Sydney nightclub the Spice Cellar has shut down, effective immediately.

Management released a statement on Friday ahead of the weekend's planned Tiefschwarz show citing "extreme duress" caused by the city's lockout laws as the reason the club could no longer operate out of its basement home at the Imperial Hotel in Erskineville.

The clubbing stalwart had only been using the space for three months, after moving from its central location to escape restrictions imposed within the 'CBD entertainment precinct'.

Despite the move, authorities continued to target Spice and the venue, and a 72-hour short term closure was imposed last month after officers allegedly witnessed staff taking drugs while working.

"The Spice Cellar has taken the difficult and heartbreaking decision to cease operating as a weekly night clubbing destination in the basement of the Imperial Hotel," the club posted on Facebook.

"The misconception and lack of understanding towards late night culture, combined with the introduction of 1:30am lockout laws has seen many venues close over the past year, putting a grave future in place for Sydney's late night entertainment industry.

"The overarching agenda by conservative groups for Sydney is to remove late night culture rather than acknowledge it as a core part of the cultural fabric that enriches a city... lockout laws are not the way forward," management said.

Friday club night Meanwhile, which also operated out of the Imperial, has ceased trading indefinitely.

Read the Spice Cellar's full statement here.