The Union Housing and Urban Affairs Ministry asked the 110-year-old Delhi Gymkhana club to vacate its premises by June 5, on Friday.
The sudden order also said that failure to comply would mean the property would be taken in accordance with the law.
The members of the club have now started a signature campaign to move the Delhi High Court against the order.
The club’s premises measure around 27.3 acres and are situated at 2, Safdarjung Road.
According to the government order, The order mentions that the land was originally leased to the Imperial Delhi Dymkhana Club Ltd. for the the purpose of maintaining a social and sporting club.
However, the order said that the land is situated close to the Prime Minister’s residence and several high-security establishments in Lutyens Delhi. The centre reportedly wants to strengthen defence infrastructure and governance-related facilities.
The institution, which was built and founded on July 3, 1913, originally catered to British administrators and military officers during the colonial period; after independence, the word imperial was removed. The structures in the premises date back to 1930.
The club has said that it wants to continue operation without it being moved.
Employees of the club have voiced their concerns over the looming shutdown.
Workers who spoke to NDTV said, “Many of us have worked here for over three decades. Some have been working here for 15 years, some for 20. We do not know how we will support our families."
"We want to ask the government. We are 500 employees and their families. We didn't get any notice. They didn't tell us anything," another said. "They only came and told us the club will be shut down on June 5. We have been working here for the past 35 to 40 years."
On Monday, the club wrote to the land and development office asking whether an alternative “appropriately located plot of land would be located. They also sought the protection of the future of all the employees and staff at the club.
Meanwhile, the Delhi High Court has agreed to hear the matter on May 26.
The opposition had also criticised the decision.
Congress leader Rashid Alvi alleged on Monday that the centre’s move was linked to Rahul Gandhi having a membership at the club.
“It is such an old club, and many important people are members. The fact that Rahul Gandhi is a member of the Delhi gymkhana club is enough to destroy it,” he said.