Brae Citroën garage Hillside Motors will close for good early next month.
Managing director Martin Tregonning, who lives in Dunrossness, is giving up the business after suffering from health issues.
The premises, which originally operated since the 1970s as Central Garage, are being sold after an offer was received from a local firm.
The offer is believed to have come from Garriock Brothers, who own the property next door to the garage, although the long-established construction company has refused to confirm any deal.
It also brings to an end the two-year venture undertaken by Mr Tregonning, who took control of Central Garage in 2013.
Efforts to find alternative premises in Lerwick failed to bear fruit.
Mr Tregonning said the business would not be taking any new bookings for after today. That, he said, would allow any outstanding work to be completed.
“I am genuinely sad about it, because we have put in a lot of effort. Dare I say it, you finally get to a point where you feel you can move ahead, and I was quite encouraged by some of the things we were doing.
“I had looked at relocating the garage into town. I’ve looked around and tried different things and there’s nothing going.
“We’re taking bookings this week, and then we’re not taking any more bookings because I want to make sure that every job is completed.
We want to end up in a situation that no job is left unfinished.”
The decision means five members of staff will potentially be left out of work at the beginning of next month. But Mr Tregonning said he was happy to make favourable references for anyone seeking their next job.
“We’ve actually been … encouraging them in getting other jobs. They will get other jobs because they are very competent.
“We’ve had some people already leave, knowing this was on the cards.”
The garage, he said, had struggled to find good staff in recent years because of the well-documented exodus of workers towards the lucrative oil and gas sector.
Hillside Motors never operated as a franchised sales dealer for Citroën. Instead, it ended up having new cars supplied by mainland dealer
Duthies of Montrose – a move which aimed to help it effectively piggy-back on a larger, mainland-based organisation, and keep costs down.
Mr Tregonning said the arrangement has worked well, and the business model stood up.
“We sold quite a few and the customers were quite happy.
“Duthies know all about it. They’re still keen to do business up here with people.”
He believed similar arrangements could be “the way of the future” for other island-based car outlets. Sales franchises, he said, were more geared towards larger sales dealerships.
“I foresee the day will come when most of the cars will be bought on the mainland but just have authorised repairers up here.”
He said the business had invested in apprenticeships, training and equipment to help improve the garage.
Although the garage is coming to an end, Mr Tregonning believes the long-running association between motorists in the isles and Citroën – the French car maker was represented by Central Garage since the 1970s – should continue in the future.
Mr Tregonning said he was confident that Citroën would search someone new to take on a franchise.
He cited the popular Shetland car, the Berlingo, as a model that would always be a common sight in the isles.
“I can categorically tell you that they are more popular here … than anywhere else in the UK.”
• Due to a technical fault an earlier version of this story, published on 21st September was lost.