The Tiger Sky Tower on Sentosa will be closing on Dec 28 this year, almost a year after it reopened following a stalling incident.
The closure was not due to the fault, managing director Alexander Melchers said in a statement yesterday.
Instead it was because the company did not come to an agreement with Sentosa Development Corporation (SDC) on renewing the lease.
The statement said the Sky Tower would be moved and rebuilt in another country.
The ascending gondola stalled at the 25m mark on Aug 12 last year, trapping 39 passengers - including children and elderly folk - for more than four hours.
As a result of the incident, the ride, which reaches a height of 131m above sea level, was closed for more than three months.
It reopened only in November last year with approval from the Building and Construction Authority.
A report revealed that the breakdown was caused by an overheated drive unit and the rescue was hampered by the failure of the manual winch used to bring the gondola to the ground.
The ride, which can ferry up to 72 passengers and started operating in 2004, had stalled twice in 2010. It has had nearly five million visitors, according to the company statement yesterday.
The Sky Tower was the first attraction on Sentosa to receive foreign direct investment.
"The discussions with SDC were very sincere and detailed, but we could not agree on the commercial terms to continue operations," Mr Melchers said in the statement, adding that it had been a very good partnership. SDC is the statutory board that manages and promotes tourism activities on Sentosa.
A spokesman for SDC told The Straits Times that the attraction's lease was due to expire in March next year, but Sky Tower decided to cease operations in December.
"SDC is working with Sky Tower on its cessation plans," she said. "We would like to assure our guests that SDC will refresh the site with exciting offerings as part of our continual efforts to curate and offer a diverse array of attractive leisure experiences for all to enjoy on Sentosa."
Dr Michael Chiam, senior tourism lecturer at Ngee Ann Polytechnic, does not think the closure will have any major impact on Sentosa's visitor numbers.
"This is because not everyone who goes to Sentosa goes there just to have a ride in the gondola. There are plenty of other attractions to go to on Sentosa," he said.
From Thursday next week until its closure, the Sky Tower will reduce ticket prices as a gesture of appreciation, said the company statement. Adults will pay $8.80 a ride and children, $4.80, instead of the usual $18 and $10 respectively.
The ride is located at Sentosa's Imbiah Lookout and moving works will likely begin in early January next year, the statement said.