Newmarket's historic Rutland Arms hotel is being put up for auction after its owners struggled to get development plans off the ground.
However, the company said complex planning requirements and the "unfortunate timing" of the pandemic meant its vision had "sadly not been possible".
"On behalf of our team, we express profound disappointment at this outcome as we had truly hoped to play a leading role in revitalising the historical fabric of not only the Rutland Arms, but also the whole town of Newmarket," said Noel Byrne, managing director of Review Hotels.
"As stakeholders in the community, we took pride in our investment in its rich history, but the circumstances have led us to the difficult decision to auction the Rutland Arms hotel.
"In relinquishing ownership, we hope that the hotel, with its storied past, will find caring and committed new owners who can restore it to its former glory."
The Rutland Arms dates to 1815 when John Henry Manners, the fifth Duke of Rutland, commissioned a builder to construct a hotel on the site of the former Ram Inn.
The hotel now features 46 bedrooms, a restaurant and bar, courtyard terrace and conference and event facilities for up to 60 delegates.
Property firm Allsops will oversee the auction on 14 December and the sale will include planning permission for a 72 en-suite bedroom hotel.