Almost 25 years after its foundation, the US-owned chain's Australian business is to be wound up with the loss of 700 full-time jobs after failed efforts to find a new owner.
Administrators failed to secure a buyer for the chain of 44 toys and baby goods stores, which have been trading since entering voluntary administration in May.
McGrathNicol said stock will now be liquidated through sales at existing stores before they, along with the head office and Sydney-based distribution centre close "in coming weeks".
"Despite productive discussions with a number of interested parties, all of the parties have now advised the Administrators that they have withdrawn from the sale process", reads a media release from McGrathNicol.
Approximately 700 workers will lose their jobs within the next few weeks as the business is wound down.
Toys "R" Us Australia was put into administration last month after a failed auction to sell the stores, just months after the retailer's US and British stores wound down their activities.
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The administrators had kept the Australian chain open while they explored a recapitalisation and a sale of the business as a going concern.
McGrathNicol told Toys R Us employees about the impending closure today.
In the United States, where Toys R Us was founded in 1948, the situation has been the same for several years as bricks and mortar stores struggle to compete against the likes of Amazon, among other online retailers.
Toys "R" Us announced in March that it would liquidate its USA operations and shut down all 735 stores.
People holding gift cards for the stores will be able to use them until July 5, provided they spend an additional amount equal to the value of the card, the administrators said.
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