Poll said in a statement that it was impossible to come to an agreement with the Local 6 of the Hotel Employees & Restaurant Employees International Union "to operate a viable restaurant and banquet facility."
Officials for the union, which represents more than 400 workers, couldn't immediately be reached by phone for comment.
Bloomberg called the outcome "disappointing" and said the city tried to play a role in negotiations but that "the two sides remain far apart."
"We can't - and won't - wait any longer for a resolution with no guarantee that one will come," he said.
The city intends to solicit new proposals for the venue, including for any possible plans to reuse it as a restaurant, over the next several months, the mayor said.
In the meantime, the building will house a visitors center, snack bar and retail shop, he said.
"Based on the proposals and the success of the venue as a visitor center and store, we'll decide whether or not to turn all or part of it back into a restaurant," Bloomberg said.
Poll, who operates the stylish Loeb Boathouse restaurant along the Central Park lake, won the 20-year license to operate the tavern in August 2009. At the time, city officials hailed his vision of incorporating green building technology while preserving the venue's historical flourishes.
Poll also had planned an outdoor cafe, bicycle racks and new public bathrooms.
When the city decided to award the license to Poll, it set off a legal tussle between the city and the longtime operators of the restaurant over who owned the famous name.
A judge ruled in March on behalf of the city, saying the name had been associated with a restaurant in Central Park since 1934.
It was operated since the 1970s by Tavern on the Green Limited Partnership and LeRoy Adventures Inc. until it closed on New Year's Eve because of financial difficulties.
At one time, the restaurant served more than 700,000 meals a year and generated $38 million in revenues.