Ham & Friends in the Grand Arcade, off Merrion Street, made the decision with 'a heavy heart' and confirmed the news on their Facebook page today.
The venture, which opened in 2017, was an offshoot of the popular Friends of Ham bar and charcuterie on New Station Street.
It was housed in a Scandi-style loft space and incorporated a wine school and cheese shop.
The news comes only days after the business won the Best City Centre Restaurant title at the YEP's Oliver Awards.
The statement read:
"It's with a heavy heart that we have to say we are now permanently closed.
"We gave it our best shot over the last year and would like to thank everyone who came to pay us a visit and gave us such nice feedback.
"We've loved being able to bring natural wine to the people of Leeds and hopefully we've helped ignite a passion in a few of those.
"Massive thanks to Team Ham & Friends for all their efforts and in particular for picking up the Oliver Award for Best City Centre Restaurant on Monday.
"At least we went out on a high..."
The Friends of Ham bar and its sister site in Ilkley will remain open.
Customers on Facebook expressed their dismay at the closure.
Zac Berrycloth commented: "Sad news, but big respect for saying it as it is and closing now rather than suffer financially to the detriment of the FOH business, which has become one of Leeds' success stories."
Victoria Aldwin added: "Gutted. Great wine. Great service. Great venue. I liked it because it was quiet and feared this would happen."
Ashley Brancker said: "Hate to be honest but the couple of times we went in it just wasn't that good and as a result we didn’t return. Not a wide enough selection of drinks; I think specialising is a good idea in theory but people want a wide range of drinks. No draught beer of any kind was strange to me. Prices were a little high too for what you got IMO. Sorry it didn't work out and well done for trying. Shame as FOH is always so busy - it’d be nice to have a back-up location."
One of the bar's Merrion Street neighbours, Bar Soba, also announced its closure today.