St Kilda's Circa the Prince restaurant to become events space

St Kilda's Circa the Prince's days as a restaurant serving a la carte meals will end on January 5. It will become an event and private dining space.

Melbourne Pub Group director Tom Walker broke the news to staff on Wednesday.

"The last two years have been really good for Circa, going from one hat to two [in the latest Age Good Food Guide]," he told Good Food. "But industry-wide, restaurants are under significant margin pressure. The margins are now very, very thin."

Circa the Prince has been consistently among Melbourne's top restaurants since 1998, when brothers John and Frank van Haandel launched the dining room in the formerly grungy Prince of Wales pub.

Circa's kitchen has been occupied by a rollcall of the city's best and brightest chefs, among them founding chef Michael Lambie (The Smith, Lucy Liu), Philippa Sibley (Syracuse), Paul Wilson (Mr Wilson's Tuck Shop), Andrew McConnell (Cumulus Inc, Cutler & Co et al) and Matt Wilkinson (Pope Joan).

But 2016 has been a turbulent year for the restaurant, with the head chef role changing three times, from Stephen Burke to Daniel Southern to Rhys Blackley.

Walker hopes to retain key staff, including Blackley and veteran sommelier Laurent Rospars, when it becomes an event space next year.

He says the difficult decision was only made last month after discussion among the Melbourne Pub Group's directors.

"Circa has had a stellar career and this is just the next phase."