Dublin City Council has announced it is to repossess the Iveagh Markets from developer Martin Keane.
The council also confirmed that it has broken off negotiations with Mr Keane on the future of the listed building.
Assistant Chief Executive Richard Shakespeare stated in an update to councillors that Mr Keane had failed to show he had sufficient funds to develop the site, which has now been derelict for 20 years.
The council previously threatened repossession two years ago, but agreed to further discussions to avoid "protracted and expensive legal proceedings in the High Court", according to Mr Shakerspeare's report.
Mr Keane has paid €2 million for a leasehold title, but as he has failed to develop the site, the council said it was entitled to refund the money, repossess the site and go to court if necessary.
Mr Keane, who owns Oliver St John Gogarty's pub and Blooms Hotel in Temple Bar, has repeatedly said over the years that he wants to develop a venue similar to London's Covent Garden.
He was first granted planning permission in 2007 and it was renewed again for five years in 2012, but this lapsed because Mr Keane was not able to receive financial backing.
The council is concerned about the "rapidly deteriorating condition" of the Victorian style market. which opened in 1906.
A survey has concluded that it will cost €13 million just to stabilise the building with total repairs costing €30m.
The original market was built by the Guinness family for street traders with both a dry market selling clothes and a wet market selling food.
The last of the stalls closed in the 1990s.
Mr Keane's original permission was for a hotel, aparthotel, a nightclub and a total of six bars in the overall development of the Iveagh, Mother Redcaps and a number of adjoining buildings.
He has now applied for a 128-bed four star hotel, 148-bed three star hotel and 75-bed hostel with a total of four bars and two "multi-function spaces" at basement and sub-basement levels.
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