Rotorua Museum will be shut indefinitely following earthquake damage and about 20 staff will be made redundant in January.
It follows a full seismic assessment of the building in which new cracks appeared after the Kaikoura earthquake.
The cracks appeared in the older part of the building, that was built in 1908.
The council closed the entire building as a precaution two weeks ago and says it now will be April before more is known.
Rotorua Museum director Stewart Brown said staff would be paid until the end of January and then they would look at redundancy. The council was also looking at options for redeployment as well as support for staff.
A core group of staff would remain, with about 23 staff still employed.
According to a press release from the Rotorua Lakes Council, the museum will remain closed until at least April 2017 when the results of a detailed seismic assessment are expected to be known.
New damage believed to have been caused by the Kaikoura earthquake prompted the 18 November precautionary closure of Rotorua Museum, which is housed in the historic Bath House in Government Gardens.
"A preliminary report from engineers who have started a detailed seismic assessment has reinforced the need to take this action until we get the full picture," Rotorua Museum director Stewart Brown said.
"We expect to have a report following that assessment in April next year and at that time we will be able to consider the longer term future of the museum and any work that's needed. In the interests of staff and public safety, the museum will remain closed until further notice.
"Unfortunately, that impacts on the employment of about half of our staff, largely those involved in front-of-house, retail and café operations," Mr Brown said.
"We do not know what the result of that assessment might be or what might follow that. It's a complex building and due to its Heritage 1 status, we also need to protect the integrity of its heritage features. That means the whole process - before we even get to assessing any work required to strengthen the building - needs to be more detailed and will take longer than it otherwise might.
"Our focus right now is on supporting staff whose jobs are affected. We need to retain a core of staff to continue those museum operations which we are able to relocate to other venues while we work through this process."
Rotorua Lakes Council will work through options with the 20 staff whose roles are affected. They will have the option of taking redundancy and there is also the potential for secondment to other divisions within Council and to local tourism operators who have offered their assistance.
"We'll do all we can to help them find alternative employment and will work through options with staff individually," Mr Brown said.
"We've had offers from other Council divisions and a couple of local tourism operations to take our staff on secondment for an indefinite period of time and the tourism and hospitality sectors are employing right now for the busy summer ahead so we are hopeful.
"We're receiving a lot of support from a wide network including other museums, tourism operators, our volunteers and the museum millennium trust and we're very grateful for that."
The historic part of the museum, the Bath House, has previously been tagged as an earthquake risk and had been scheduled for a detailed seismic assessment.
The new damage inside the building, which was constructed in 1903 and has for many years had cracks which have been marked and monitored, prompted the museum to be closed as a safety precaution.
The damage is limited to the historic, central part of the building, and includes cracking and movement in walls, ceilings, floor slabs, beams and columns. Some existing cracks have also changed.
"Given the new level of risk is unknown and knowing how long the detailed assessment is likely to take, we've had to make the decision to close until further notice," Mr Brown said.
"It's upsetting for everybody that we are having to do this - we have some excellent, very passionate staff and this was the last thing we wanted to have to do."
The affected staff are a mix of casual, fixed-term, part-time and full-time in retail, customer service and hospitality roles.
"We'll need to retain a core of staff as we work through what we need to do to reposition the core museum functions.
"Our focus at the moment is on supporting our staff through this," Mr Brown said.
"They have today been informed of what's proposed in terms of their individual jobs and will have the opportunity to provide feedback. We wanted to give them certainty, either way, before Christmas so they have the opportunity to find work."
Staff will have access to council's employee assistance programme and will receive any other support council is able to provide.
"We understand this is an awful time of the year for people to be going through such a process but public and staff safety has to be our key priority."
What's happened so far:
A RAPID Evaluation Safety Assessment of the building was conducted by structural engineers following the Kaikoura quake.
In the interests of safety, the engineers recommended closing the basement to public access and limiting the number of people in the affected part of the building to 150 at any one time.
Due to the difficulty involved in managing that, it was decided to close the museum until council had a better understanding of the risks.
Following subsequent meetings with engineers and legal advisers to determine the safety and risk implications for staff and visitors it was concluded the risks to reopen, without a full in-depth report on the building's earthquake seismic strength capability, were too high.
The detailed seismic assessment will involve researching existing documentation and information about the building, opening up and checking the strength of walls, investigating how the building was constructed, core sampling and scans and geotech investigations.
Alternative venues and locations are being sought for the museum's educational programmes, events and exhibitions. Museum staff are conducting free daily tours (Mon-Fri) at 11am and 2pm of the outside of the Bath House and Government Gardens which will operate throughout the closure time, weather permitting.
• On Monday November 14 after the Kaikoura earthquake engineers recommended closing the basement and later that week recommended limiting the number of people in the affected part of the building at any one time. Because of the difficulty managing and limiting visitor movement in the museum and in the interests of safety, the museum was closed from Friday November 18 as a precautionary measure.
• Subsequent meetings with engineers have made it clear the detailed seismic assessment will take until at least April 2017. In the interests of safety, the museum will remain closed for the duration of this work.
• The museum building has previously been assessed as being an earthquake risk and a detailed seismic assessment was coincidentally due to begin this week.
• Staff are being supported and stakeholders are being notified of the decision.
• The newer wings at either end of the museum are not affected.
• The affected part of the museum has become a building site.