The news came in an announcement by the attraction’s chairman, John Breheny of building company Breheny.
In an email to friends of the project he said: "It is with immense regret that I am having to write to you, to announce the closure of the Butterfly World Project, effective from the end of the 2015 season."
"Butterfly World remains a seasonal visitor attraction, and the cumulative level of trading losses could only be sustainable whilst there was still a realistic hope that the necessary funding could be found to build the [proposed] biome and thereby complete the project.
"Without the prospect of a viable phase four Biome, I can no longer expect Breheny employees to fund the project indefinitely without being able to promise them even the merest hope that some of the considerable investment to date and the sacrifices they have made, will somehow produce some level of reward."
The attraction was part of the Rose National Rose Society gardens, sold off in 2003. Butterfly World Trust bought three-quarters of the RNRS's 24ha gardens after outbidding a £3m offer from property developer Catesby.
A competition called Future Gardens launched the Hertfordshire attraction, with Andy Sturgeon and Peter Thomas among 12 participants paid £12,000 each to construct their garden designs. Ivan Hicks designed the landscaping on the site.
On launch in 2009, patrons David Attenborough, David Bellamy, Alan Titchmarsh and Emilia Fox, as well as most of the gardening media, praised the attraction, but only 3,000 paying visitors came in the first month.
Founder Clive Farrell said he hoped for 600,000 a year, and a figure of a possible one million visitors a year was quoted in planning documents. Some 50,000 a month were needed to keep the site going.
A planned 100m diameter biome, due to open in 2011, was not built and the site closed each winter. The future of the site is not yet known.