The receivers of Allans and Billy Hyde say the music stores will close within the next few weeks, as no buyer for the business has been found.
Australian Music Group (AMG), which owns the two iconic retail brands, owing more than $40 million to creditors.
The receivers, Ferrier Hodgson, say they have been trying to find buyers for the business, but those efforts have failed.
In mid-September, .
Prior to receivership, the company employed around 613 people employed across 25 company-owned stores, four franchise stores and the firm's head office in Melbourne.
The four franchise stores, which are independently owned, will remain open, but the 513 remaining employees across AMG's operations will lose their jobs.
The receiver, Brendan Richards, says he appreciates the efforts of the company's staff.
"The loss of jobs is disappointing, but we exhausted all avenues and there is no other way forward for this business," he said in a statement.
"These people have served music lovers and been a key part of the Australian music industry for generations.
It is a sad day for live music in this country." Mr Richards says he will work with the administrator to make employee entitlements available through the Federal Government's Entitlements and Redundancy Scheme (GEERS) as soon as possible.
The receivers say all stores are now in closedown mode, with the doors expected to shut for the last time in early November.