Mr Green has leased the premises for the past seven years but said it had simply become too expensive to run the bookshop and small cafe.

Mr Green is unsure what will take the place of Book Barn but has an inkling redevelopment works are planned for the area.

Mr Green's announcement comes as Daylesford is still mourning the loss of its iconic Boathouse Cafe, which burned to the ground in early December and was demolished just before Christmas.

Hepburn Shire Council has confirmed it will rebuild the Boathouse and is currently working with insurers through the next steps of the process.

Book Barn owner Mr Green said he had been fielding enquiries from customers about the Boathouse and had also picked up some business.

"We've had lots of people come in and ask what's happening with it all," he said.

"In the seven years I've been here I've had about two people ever ask me if we sell alcohol and since that's been down people have come in and said 'have you got alcohol'.

"And I don't have a licence so they've gone off.

"So I'd say people who wanted food, a main meal, have gone elsewhere but we've picked up a lot of the coffees and smaller things.

"So it has been good for us."

Mr Green said he has loved his time at Book Barn.

"I've had a great time here and I really appreciate the local support, the local community has supported me," he said.

"But times have changed and it's just becoming too expensive to operate as a bookshop and small cafe.

"I have regulars who come in all the time and people have been saying, 'Oh, what's going to happen?', and I tell them I think it's going to be redeveloped and they say, 'Oh, it won't happen, it won't happen."

Mr Green is trying to reduce his stock and currently has a three books for the price of two sale.

He's planning more sales for the coming months.

"I'm not sure what's next for me but I'm hoping I can stay in Daylesford and I can find useful employment," Mr Green said. "I'm available, it doesn't matter what I do, I just want work and I'd like to stay in Daylesford."

Hepburn Shire CEO Aaron van Egmond last week said council had provided the Boathouse insurer with copies of the original plans to assist in rebuilding the icon.

"Council has also been talking to the Boathouse leasee about progress with the rebuild process," he said.

"Plan and design specifications are currently being developed, but council is unable to confirm when the rebuilding process will commence at this stage."