The cafe in the Stornoway sports centre is set to shut at the end of this month.
The facility has been running at a loss since the council took it over in 2011.
A £20,000 shortfall is expected this financial year.
The total loss over the past six years stands at £102,000.
Vending machines will continue to offer snacks and hot drinks in the centre.
Implications for jobs will be considered by councillors later this week.
Western Isles Council’s development committee heard two private operators ran the business previous before the council stepped into keep it going.
A report by Louise Laing, the council’s trading operations’ manager, said: “Despite the continued efforts of the staff, the business has not been able to break even since opening.
“Any shortfall has been covered by savings made in the other trading operations or by the education and children’s services department budget.”
The committee agreed the closure.
The decision is due to be ratified by the full council next week.
