Ellis Close in Port Augusta is one of four detention centres across the country that will be closed by the end of February.
Immigration Minister Scott Morrison, who made the announcement yesterday, said the move will save the government $88.8 million a year.
The Scherger facility in Queensland, the Leonora facility in Western Australia and the Pontville facility in Tasmania are the other three.
Mr Morrison said the remaining detainees in Scherger, Port Augusta and Leonora will be transferred to other facilities in the coming weeks.
He said the facilities were never envisaged as being permanent.
"These sites are remote, relatively small and expensive," Mr Morrison said in a statement.
"While I acknowledge there will be an impact on some local business and service provider staff, these closures bring significant financial savings for the government and the Australian taxpayer."
Federal member for Grey Rowan Ramsey said the decision shows that the Coalition’s border protection policies were working.
"It is a clear signal that the no exemption policies adopted by the Coalition are restoring the security of Australia's borders" he said.
“While those working at the facility in Port Augusta will lose their jobs and that is always an unwelcome outcome from this kind of decision, no one could justify keeping the facility open when there is no further use for it.
“Quite simply, with no boats, there is no requirement for detention facilities.”
Mr Ramsey offered his support to any Ellis Close employee who was struggling with the news.
"I understand the workers are employed under contracts and would expect that they would be paid out in full or transferred to other facilities.
“If they are experiencing any difficulties in this area I ask that they contact me.”
Mr Ramsey said in the coming weeks the detainee population in Port Augusta of just twenty two will be transferred to other detention facilities, allowing the facility to close.