Daunt Books Chelsea will cease trading next month owing to "extremely high" rent and rates.
The Fulham Road branch will close in mid-February, with the exact date to be confirmed.
Rose Cole, manager of Daunt Books Chelsea, said: "It is with great sadness that Daunt Books announces the forthcoming closure in February of our Fulham Road branch.
"Despite the success of the shop and the continued loyalty of our customers, we find ourselves unable to meet the extremely high rent and rates demanded of us. This brings to an end the long heritage of bookselling on the site, having first been home to The Pan Bookshop.
"We would like to thank our many loyal customers, as well as our exceptional team of booksellers."
The six booksellers at the Fulham Road shop, which opened in October 2008, will now join staff at other branches. In recent years the Chelsea branch had come under threat after plans to redevelop the 1970s building were approved Kensington & Chelsea Council.
Founded in Marylebone High Street in 1990 by Waterstones m.d. and Barnes & Noble c.e.o. James Daunt, following the closure of the Chelsea branch, Daunt Books will have eight bookshops with plans to open a ninth in Summertown, Oxford, this spring.
The Bookellers Association (BA) has long called for an overhaul of business rates, which has seen growth in business rates outgrow inflation and become a huge financial burden for bookshops amid a tough trading climate for the high street as a whole, which saw retail sales fall for the first time in 25 years, according to The British Retail Consortium. Last month Boris Johnson's government pledged to cut business rates in a bid to revive the high street, with a 50% discount for small retailers.
BA m.d. Meryl Halls said: "The closure of an iconic bookshop in an iconic location – especially at a time of relative confidence for bookshops – is a timely reminder of the real life pressures on bookshops of all types. Closing due to increased rent and rates is such a waste – a waste of a great bookshop in a community that values it being there, a waste of a retail location which brings culture and connectedness to its customers, a waste of the talent of the people working in the bookshop. We are really sad to hear of this news, and we wish the staff well in their future endeavours. We will ensure that we use this example in our ongoing representation work, proving the point that, without attention being paid to rampant rent increases and dysfunctional rates, the diversity and richness of our high streets is in real jeopardy."