Mental Health Aberdeen (MHA) has been forced to close with "immediate effect" after 75 years in the North-east.
The charity announced the decision on social media yesterday after the Board voted to shut down its services.
In a statement, Mark Lough, Mental Health Aberdeen chairman said: "It is with sadness and regret that, on behalf of the Board of Trustees, I am announcing the closure of Mental Health Aberdeen (MHA), with immediate effect as of Thursday 24th July.
He said they had been working "tirelessly to explore all available options" for the charity to continue delivering its vital services.
These services included Aberdeen Counselling and Information Service and One To One Deeside, ACIS Youth, and community projects in Torry and Calsayseat.
He said: "Sadly, this decision has been reached following an extensive period of strategic review, external consultation, and careful consideration of all viable options."
Mr Lough said the demand for mental health services in the North-east is growing at an "unprecedented pace."
He went on: "Despite strategic decisions to invest over the last few years, with the intent of diversifying funding streams from other sources of income away from traditional public funding and fundraising sources, we have not been in a position to realise the long-term benefits of this in the current landscape.
"The year ahead has also become increasingly uncertain. Funding has been reduced or withdrawn, and upcoming contract negotiations offer no guarantee of renewal. Rising operational costs, including a significant increase in National Insurance contributions, have added further strain.
"Despite the team’s tireless efforts to meet rising demand, our current income can no longer sustain the level of service we aim to provide. Like many third sector organisations across the country, we are facing the stark reality of being asked to do more with less - a position that is no longer viable."
The charity are working with UK accountancy business advisory firm MHA to support the navigation of the legal process.
The chairman said all its services, shops, and head office will "cease to operate immediately.”
Michael Reid, of MHA accounting and business advisory firm, said: “After careful review of Mental Health Aberdeen’s financial condition, it became clear that the only realistic option was to cease service provision and move to liquidation.
“I appreciate that this is devastating for Mental Health Aberdeen, its staff, volunteers and service users, particularly in this, its 75th year. This is an extremely sad situation.”
Mr Lough added: "We would like to take this opportunity to thank our staff, volunteers, partners, and supporters for their commitment and compassion over the past seven decades and during this extremely challenging time.
"This decision will have a direct impact on each of them, we recognise the significance of that and many of us will feel this deeply.
"Finally, we are calling on funders, partners, decision-makers, and government policy makers to recognise the urgent need for greater investment in mental health support.
"It is vital that charities, like ours, are given the tools and resources to continue delivering essential services to those who need them most, before it’s too late."
Following the announcement it has been reported this morning that one of the UK's biggest suicide prevention charity's is planning to close more than 100 branches.
The chief executive of Samaritans told staff that "at least half" of their branches will close across the country, the BBC reports.
The Samaritans said having more than 200 branches "is not sustainable and hinders us" from providing the best service.
Chief executive Julie Bentley said some offices were failing to retain enough volunteers and "don't support the effective delivery of our services to callers".
She also expressed concern that too much of the Samaritans' income is spent on "maintaining bricks and mortars, rather than being used to improve our services."