The cabinet office said in a statement that the Four Seasons Resort Great Exuma at Emerald Bay, which opened in 2003, will close May 26.
Most of its 500-strong work force will be dismissed within 30 days.
The statement said "some staff will be retained for the transition period to new ownership," and the government is helping the search for investment to acquire and reopen the hotel.
The resort is part of a 500-acre (202-hectare) development that includes a marina and golf course. In June 2007, the owner of the master development, EBR Holdings Limited, was unable to meet its debt obligations and it was placed into receivership.
In a statement, Toronto-based Four Seasons said it has agreed to an orderly closure and "it is unlikely that the hotel will reopen as a Four Seasons."
Other big Bahamas resorts have recently announced layoffs as the world economic crisis slashes tourism across the Caribbean.
In January, the Westin and Sheraton Grand Bahama Our Lucaya Resort said 181 employees, or about 18 per cent of its beachfront work force, were let go.
Meanwhile, the sprawling Atlantis resort has dismissed about 800 workers this season, and Baha Mar Resorts Limited laid off some 80 employees at two Bahamas locations.
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