The Quiet Man distillery project at Ebrington stalled last year when the company behind the proposals said it would no longer proceed.
It had been hoped another company would pick up the project.
Derry Daily reported earlier this week that a lot of work was going on behind the scenes to find a replacement for the Quiet Man Whiskey Distillery following its withdrawal due to a tax change implemented by the British Government.
A Scottish developer in partnership with American drinks giant, Luxco, were ready to step in and take over the distillery.
But the two sides in the proposed partnership could not agree on the distribution rights for the product in the US and the deal fell through.
Councillors were notified on Tuesday the distillery project was no longer being pursued.
The Northern Ireland Executive Office told Derry City and Strabane District council’s strategic planning committee that plans for a hotel, office space, café, restaurant and bar all remain on track for the Ebrington site.
An Executive Office spokeswoman said: “The buildings associated with the proposed distillery will be placed on the market during June 2019.”
The distillery was seen as a key component of the regeneration of the former military site and would have been the first whiskey distillery to open in the city for nearly 200 years.
Work had been under way on the Quiet Man distillery at Ebrington since 2017, but in November 2018 the company behind the project, Niche Drinks, confirmed it would not proceed.
Sinn Féin MP Elisha McCallion said work to find a replacement company to take on the project had now fallen through.“We now need now to ensure, as this building goes back on the market, that a new tenant can be found that will deliver a top-class facility in this site,” she said.
Ebrington is the largest regeneration site in Derry.
The 29-acre site continued to operate as a military barracks until 2003.
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