A nearly 50-year run serving Japanese cuisine in Waikiki is coming to an end for the familiar Kyo-ya Restaurant.

The restaurant with its elegant garden setting adjacent to Fort DeRussy at 2057 Kalakaua Ave. plans to close next year because of soft business.

Restaurant owner Kyo-ya Co. Ltd., a subsidiary of Tokyo-based Kokusai Kogyo KK, said the restaurant's catering operations will cease at the end of this month, and the restaurant will not take reservations past March 31, 2007.

The decision will affect roughly 100 employees who Kyo-ya Co. said it is committed to helping through planned assistance programs.

Kyo-ya recently began seeking to sell or lease the restaurant property, which includes one parcel it owns and one parcel it leases. No asking price for the 25,000-square foot building was included in a listing from local broker Terada Real Estate LLC.

The restaurant dates back to 1958, and was acquired in 1962 by Kokusai Kogyo founder Kenji Osano, who went on to acquire and develop several Sheraton hotels in Hawai'i.

Kokusai Kogyo replaced the original two-story Japanese teahouse-style building in 1991 with a larger $15 million two-story complex.

Two years ago, New-York-based investment fund Cerberus Partners LP bought a 65 percent stake in Kokusai Kogyo and its Hawai'i assets, including the restaurant and the Sheraton-Waikiki, Royal Hawaiian hotel, Sheraton Moana Surfrider, Sheraton Princess Kaiulani and Sheraton Maui.

This year, Sheraton said Kokusai Kogyo was considering major changes to some of its properties in Hawai'i, including replacing the diamondhead wing of the Moana Surfrider with a new hotel and tearing down part of the Princess Kaiulani Hotel to make way for a new time-share tower.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.