The 102-bed nursing home in the northern suburb of Roxburgh Park, owned by Vitality Care, entered administration in May.
Three months later, a damning audit report released by the Aged Care Standards and Accreditation Agency found the home failed to meet 18 of 44 accreditation standards, including clinical care, following an inspection conducted in the same month as the collapse.
The federal government had given administrators until 5pm (AEDT) on Monday to find alternatives to closing the home and relocating its 81 residents.
But administrator Stephen Longley, of accounting firm PricewaterhouseCoopers, last night told residents and their families a bid to sell the home as a going concern had failed.
"We have done a lot of work over the weekend to achieve the sale by the close of business today but we haven't made sufficient progress to demonstrate that we could get funding (to run the home) for another month," he told reporters.
"A lot of time and effort went into trying to achieve a sale and to come up short is very frustrating," he said.
Residents would be relocated over the next three to four weeks, Longley said, with assistance from the Department of Health and Ageing and in consultation with residents and their relatives.
Industry peak body Aged and Community Care Victoria chief executive Gerard Mansour said he expected the transition for residents would be smooth.
"I have called on our members in nearby locations to actively assist any relocation and have been greatly pleased by the positive expressions of support I have already been given," he said.
