A major hotel chain has announced it will close its maine in Sydney’s beachfront in 2019 as part of a restructuring, with staff and residents losing their homes.

Key to the plan is a $1 billion expansion at the beachfront’s Keyes Spa and Hotel, with the hotel now the third largest hotel in the country, after the Sydney Opera House and Sydney Harbour Centre.

Keyes Spa has more than 2,000 rooms, a pool, an ice rink, a bar and bar, a cinema and a gym.

In the next 12 months, staff will lose their homes and will be moved to hotels on the southern shore of the Sydney Harbour.

Keyed will be able to offer new luxury suites to its clients, but will have to close all of its hotels in Sydney, except for its main campus, for a time.

Keyers chief executive David Farr said the hotel had “tremendous momentum” but would have to be closed to make way for the $1.5 billion expansion.

Keye, the hotel that had been the target of the restructuring, is expected to close at the end of 2019.

“The plan is for Keyes to close in 2019 and we will be looking at other options,” Farr told reporters on Tuesday.

“It’s really sad that we’ve had to close this property, we are going to close it.”

Keyes will have two new suites, with more than 1,000 sq metres of space, a large rooftop pool and a cafe and bar.

Farr said staff would lose their jobs and would not be able access the pool.

Key has said it will be the first of many major hotels to close due to the financial restructuring.

Keyes, which opened in 2008, is now Australia’s largest hotel chain, with 2,600 rooms.

Key’s latest financial results showed the company lost $11.9 million in the three months to June 30.