The NSW National Parks and Wildlife Service (NPWS) will be shutting down the clothing-optional area at Tyagarah Nature Reserve by August 30.

Tyagarah has been a designated clothing-optional beach since 1998.

A meeting with NPWS, NSW Police, businesses, community groups and naturists concluded that there were no appropriate alternative locations for a nude beach.

Long-time residents have celebrated news, following reports of lewd behaviour on the beach.

"We just could not tolerate the sexual, inappropriate behaviour that was happening down there so often, which made it totally unsafe for locals to even walk down the road to the beach without being accosted,” Gwen Gould told ABC News.

"I feel sadness for the people that want to go naked, but they were having their freedom at the expense of ours."

Northern Rivers Naturists president Bradley Benham told ABC News that it was disappointing that the beach had closed, but not a surprise.

"The fact that that's now been found to be a jurisdictional error and that those signs were invalid doesn't change the fact that it has been used as a nude beach for 25 years."

The community is planning a send-off celebration, with naked Frisbee, volleyball and cricket.

Benham told The Guardian that he is willing to risk fines and jail to continue using the beach.

“Some people certainly work in jobs where they don’t want to be arrested and have to go to court,” he says.

“I’m fortunately in a position where I’m prepared to do that for what I believe in.”

“That’s how much this means to me.”