Paul Bocuse's L'Auberge du Pont de Collonge restaurant will lose the three Michelin stars it has held continuously since 1965.
The makers of the red guide have confirmed that the restaurant in Lyon, France will be demoted to two Michelin stars when the 2020 Michelin Guide France is published on 27 January.
The restaurant, established by the father of gastronomy, who died in 2018 at the age of 91, had held the accolade for 54 years.
The restaurant and Bocuse family said: "Although we are upset by the inspectors' judgment, there is one thing we never want to lose, and that is the soul of Paul."
In 2015 Bocuse had been honoured on the restaurant's unprecedented 50-year anniversary of holding Michelin's highest rating, by being named Grand Officer of the National Order of Merit.
The Culinary Institute of America in New York had previously named him Chef of the Century in 2012, before announcing it planned to change the name of its Escoffier Restaurant to the Bocuse Restaurant.
The chef's most famous dish was created in 1975, when he cooked soupe aux truffes (truffle soup) for a presidential dinner at the Elysée Palace. It still features on the menu at L'Auberge, alongside sea bass stuffed in a puff pastry shell with choron sauce and Bresse chicken with truffles stuffed under its skin and cooked in a pork bladder, which inflates like a football before being carved at the table.
As well as leading the nouvelle cuisine movement, Bocuse founded the Bocuse d'Or competition, which since 1987 has seen some of the world's greatest chefs compete in what has been affectionately know as the world cup of cooking.