The council had only received the signed agreement on Monday, Mr Freeman said, so it had not been in a position to advertise for a new operator.
The theatre would remain closed until a new operator was found, which the council would be advertising for next week.
Mr Freeman said: "It is council's desire to continue to have a movie theatre operating in Central Hawke's Bay, and we are committed to keeping it open.
The council hoped to have the theatre open again in a few months.
Hawke's Bay Today understands there were up to 13 staff at the theatre, who were laid off at the end of last week. The termination of the lease was discussed at a publicly excluded Central Hawke's Bay District Council meeting on Friday.
Ms Hobbs-Turner had approached council on a "without prejudice basis" to see under what terms and conditions her lease for the premises could be terminated. She was the third leaseholder of the council-owned building since it opened in 1981.
In the long-term plan consultation on the building's future one of the options, based on ratepayers' views, was to close the theatre or sell the building.
That would achieve rates savings of $200,000 per annum in operating and maintenance costs, with potential to reduce debt from the sale.
