Organisers of the Magical Journey, at The Belfry Golf Club, near Sutton Coldfield, said they had "no alternative" after a "key financial backer dropped out".
The attraction closed temporarily after receiving hundreds of complaints on its opening day last month.
Ticket-holders have been advised to contact their banks for refunds.
In a message posted on the attraction's website on Monday night, bosses apologised to those who had bought tickets.
"After all we've been through having to shut down in the final week is devastating," they wrote.
"However, today a key financial backer has dropped out leaving us in the lurch. We have tried desperately over the last few hours to find a replacement but to no avail."
The attraction had been due to operate the event until Christmas Eve.
Llewelyn-Bowen, who said he only found out about the closure via Twitter, said he was shocked at the news.
"I was really impressed with the way they addressed all the issues the first time around and the energy and resources that went into it so I'm extremely surprised the towel's been thrown in at this stage," he said.
His contribution had only been "some design concepts" and he had not backed the project financially, he added.
"I feel very much I was the designer and I'm a very public face so people are cross with me," he said.
Helen Blakemore, from Aldridge in the West Midlands, visited the Magical Journey on Monday night with daughters Lucy, eight, and Molly, 11.
She said it had been "very busy" and there was "no indication" of any problems.
"There were lots of helpers, lots of happy elves," she said.
"It was wonderful. The kids thoroughly enjoyed meeting Santa."
Other customers took to Facebook to express frustration at the short-notice cancellation.
Tracy Peach said it was "so unfair for families who have paid for their children to go."
"How awful to have to tell them at this point that Santa won't see them," she wrote.
Louise Tanner branded the attraction "the tragic journey" and said she had received an email on Monday night advising her of the closure.
The Belfry's managing director Lynn Hood said the resort had not charged operator Magical Journeys for using its land.
She said because the firm was a start-up company the hotel had not asked for payment.
"We genuinely thought they would create a magical journey," she said.
"We're shocked and very saddened at what's happened."
"We were given no prior warning."
The event closed for three days last month, after dissatisfied customers branded the top price of Â£22.50 for a children's ticket a "rip-off".
Some reported seeing elves smoking and criticised the poor quality of gifts handed to children.
Event director Paul Dolan admitted bad weather had hampered first-day preparations and it had not been ready to open.
A much-criticised Christmas attraction designed by Laurence Llewelyn-Bowen has closed down permanently.