DENBIGHSHIRE County Council has confirmed that the Scala Board has agreed - in principle - to hand back the building's lease and the keys following a formal request from the Council's legal representatives.
The Council has now said that is now in a position to be able to seek serious expressions of interest from experienced operators to re-open the venue as soon as practically possible.
Councillor Huw Jones, Cabinet Lead Member for Tourism, Youth and Leisure, said: "While I am saddened to see the end of the Scala in its present form, it was in the present Scala Board's hands to end this uncertainty, which they have decided to do.
"Now, we need to start looking forward to a bright new future for the venue and I can assure residents that we will now move forward and we are keen to hear from experienced operators with a clear commercial approach but who will run the cinema as a key community asset.
The Council has received a number of expressions of interest and commented that they will "need to consider these through the correct processes" and that they are "keen to offer the opportunity to as wide a field as possible in order to find the right operator".
Councillor Huw Jones added: "The Council has maintained its strong commitment and support for the venue as we recognise the value to the town's economy and regeneration of the High Street.
"We want to secure the future of the Scala. We have a strong and clear track record of turning around the fortunes of failing facilities and we are very confident because of the numbers of expressions of interest we've already received - we are pleased that we're now able to now formalise the process for receiving and evaluating those proposals.
"This should offer the people of Prestatyn and the wider county confidence that Denbighshire means business when it comes to securing a far brighter future for the Scala.
"The Council's priority is to put its efforts into working with an appropriate operator. It's time to draw a line and start in earnest to plan for the future".