The Penrhos Polish Home near Pwllheli in Gwynedd, built for Polish war veterans is to close in March 2021, with Care Forum Wales calling it an "absolute tragedy".
The closure which will affect around 30 residents is being blamed on financial difficulties.
A daughter of one of the residents said: "It's not just the residents that will suffer because of this move, but also the staff".
“As a result, management, office workers, maintenance and grounds people all face job insecurity and homelessness.”
The Penrhos Polish Home, which recently celebrated its 70th anniversary, was built on a former RAF base where Polish servicemen were demobilised after World War Two.
Polish Home Society board member Kasia Rafalat said the decision was taken "with deep regret" after all other options had been explored.
"Our aim at all times has been focussed on protecting the welfare and well-being of residents and staff and ensuring that their needs are looked after for the future," she said.
’This heart-breaking situation mirrors uncertainty across Wales’
Mario Kreft, chair of Care Forum Wales, said: “The impending closure of this home is an absolute tragedy.
“The home have been long-standing members of Care Forum Wales and our thoughts are with the residents, their families and staff at this difficult and uncertain time.
“This heart-breaking situation mirrors the uncertainty in the social care sector across Wales and has highlighted the financial crisis facing our care homes which are such vitally important community assets."
He added: "I would urge all North Wales politicians, who are naturally showing their concern in relation to the Polish home, to examine the fundamental cause of the problem because this is not a one-off situation. It is a deep rooted crisis."
’Plan is needed to sort out this grossly inequitable situation once and for all’
In June, Care Forum Wales published a league table of care home fees which starkly illustrates the fundamentally unfair post code lottery that has plagued the sector for years.
This table shows a care home in Cardiff will receive nearly £9,000 a year more per resident than the Polish care home in Gwynedd for providing exactly the same service.
Mr Kreft said: “As a result, we gave Gwynedd Council one of our Cheapskate Awards for being in the bottom 10 of this league of shame.
“It’s clear that south east Wales is faring far better than north Wales so yet again we are seeing evidence of an unfair north-south divide.
“This is why we need an urgent national action plan is needed to sort out this grossly inequitable situation once and for all so that we have fees that make sure that care homes not only survive the immediate crisis but are still there in the long-term so that they can continue to serve our communities across Wales in the future."
Gwynedd council’s cabinet has already approved its application to operate in Gwynedd as a social housing provider, allowing elements of the site to be transferred to Clwyd Alyn.
Gwynedd council said it was working with the home to establish "a joint support package that would ensure that the home's residents continue to receive the care they require".