The St Kilda pub known affectionately as "The Espy" will shut on Sunday May 17 and will not reopen until the summer. It is understood musicians who were booked in for gigs after this date have been asked to find an alternative venue.

In a statement released late on Monday afternoon, it was announced that the "extensive" revamp would include sound and lighting upgrades of the Gershwin Room (which hosts the television show RocKwiz) and new food and beverage spaces.

"Once our renovations are complete, The Espy will have opportunities to view the stunning bay and sunset views from this prime location overlooking the foreshore," it said.

Although it is not spelt out in the statement, Fairfax Media has been told a new restaurant will be built in an upper floor of the building.

Port Phillip councillor Serge Thomann took to his Facebook page to welcome the announcement, saying The Espy with its furniture patched with gaffa tape was clearly in need of a facelift.

"Having a restaurant on the first floor which is not being used at the moment by the public is a great outcome," he wrote.

"The quicker it will reopen, the better for all. We all love the Espy and have fond memories there."

While management have pledged to keep live music "a central part of the culture and identity of the venue", there are some that are likely to be feeling nervous at the extent of the change.

Phoebe Dubar, who fronts Melbourne electronic group Passerine, received a call last Friday saying her May 22 gig would have to be cancelled because of the renovations, giving her just three weeks to find another location.

She said she hoped that the revamp was not too radical. "It is looking a bit tired but that's the whole charm," she said. "Don't mess with it too much."

It is unclear why the May 17 closure date has been chosen, as Port Phillip council were yet to receive a planning application for the renovations, according to mayor Amanda Stevens.

As the building is subject to heritage overlays, permission will have to be sought from council before construction can begin. This process can take at least a couple of months.

Around Melbourne, the viability of a number of live-music venues has been under the microscope in recent years, particularly in the St Kilda area.  Days before the state election, now Premier Daniel Andrews committed to chip in funding to save the Palais Theatre, after its future was thrown into doubt due to the urgent need for repairs.

Earlier this year, the Prince of Wales - home of the Prince bandroom - was sold to a Chinese property developer, prompting concerns about the long-term future of the venue.

In early 2014 The Espy was put up for sale by owners Paul Adamo and Vince Sofo. The property was listed with Mathew George of Jones Lang LaSalle who said the venue was taken off the market because the owners did not get the price they were looking for.

Built in 1878, the hotel is perched in prime real estate, overlooking Port Phillip Bay and the St Kilda promenade.

The managers of the venue have asked its customers be patient "as we transition and breathe new life back into this iconic music venue". They plan to have it reopened come summer this year.

The Espy's closure will undoubtedly be a blow for Fitzroy Street, which is already struggling to draw crowds and fill vacant shop fronts, as reported in The Saturday Age.