Trustees have agreed to cease offering accommodation at YHA Shining Cliff in Derbyshire from the end of September.
The decision was taken at a recent meeting of the YHA Board and was prompted by changes in a new lease agreement for the secluded woodland Youth Hostel.
YHA rents the 22-bed property, on the edge of the Peak District, from the Grith Pioneers and the agreement is due for renewal at the end of this month.
However, under the proposed terms for a lease to cover the next 15 years, annual rental costs for the building will more than treble.
YHA Operations Director Mark Farmer said: “It is not practical for us to continue at YHA Shining Cliff.
“Aside from the increase in rent, the site is becoming increasingly difficult to operate. No supplier is now willing to deliver direct to the hostel and basic servicing is becoming harder to maintain.
“Adverse customer reaction to the poor access is also on the increase.”
Mark also points out that the building requires investment if it is to continue to operate at YHA bunkhouse standard.
He added: “The business is simply not of sufficient size to justify this level of expenditure.”
Taking into account all the factors, the director recommended that the lease should be turned down.
Trustees agreed with the recommendations at a meeting in Matlock this weekend. YHA will now inform the landlords of the decision and has three months to vacate.
Elsewhere in the region, YHA recently added a new bunkhouse to its ranks at Sheen, near Hartington, and will officially launch YHA Crowden, a brand new facility near Glossop, next week.