In September Minister Nelson McCausland, whose department funded the concert space, held an information session for potential investors interested in running the facility following the end of the City of Culture celebrations.
Only one potential investor showed an interest in taking over the venue.
However, they dismissed it as a viable profit making venture.
Minister McCausland said: "The Venue has made an important contribution to the success of the UK City of Culture 2013.
"However, The Venue is a temporary facility and from the outset it was planned that it would be dismantled in January 2014.
"As there is no appetite within the private sector to finance and run The Venue beyond 2013, my department will proceed with the plans to commence the dismantling works in January 2014."
The 2,000-seat pavilion, in the Ebrington area of Derry, was built at a cost of £5m.
It hosted the One Big Weekend and names such as Elvis Costello and the Dalai Lama during the City of Culture celebrations.
And in September campaigners, including local SDLP MP Mark Durkan, encouraged the private sector to help secure The Venue's future after 2013.
Sinn Féin Foyle MLA Maeve McLaughlin says she is disappointed following the announcement.
"Following the very successful 'One Big Weekend festival' I expressed the opinion that we needed to be making a case to retain this fantastic venue after 2013.
"The huge success of this and the many other hugely successful events including Fleadh events hosted in the Venue have shown what such a facility can attract."