The eatery at the corner of Hudson and Leroy streets known for its lunch items and award-winning cupcakes closed its doors around May 6, neighbors said.
The owners of the restaurant, which locals said had been open at least five years, did not immediately respond to inquiries about plans to relocate.
The Village Voice named Out of the Kitchen's cupcakes the best in the city in 2009, and New York magazine called Out of the Kitchen a neighborhood favorite that was "nothing special but enormously convenient."
Jon Blechman, manager of the neighboring wine bar Lelabar, said he expected to see a higher-end restaurant move into the prime realty.
"It's a fantastic location and I'd love to see a good restaurant go in there," he said.
Sara Jane Roszak, owner of the landmarked building, did not immediately respond to questions about a future tenant.