Fifty-three staff were told at a meeting on Tuesday that they had lost their jobs.
The business was established in Derry in 1830 by Thomas Austin.
In November 2014, the building was sold to the City Hotel Group. The receiver then sold the trading side of the business.
In a statement, the group said they were not notified of the closure.
"It is with regret that the directors of the City Hotel have learned from media reports of the closure of the business operated by the trading company known as Hassonzender Ltd.
"We would point out that the City Hotel Group have no involvement in the trading business conducted by Hassonzender Ltd.
"We were not consulted about, nor did we have any notice of this closure."
Speaking to BBC Radio Foyle, Ronan Duffy, of McCambridge Duffy LLP, confirmed he had been appointed liquidator of the company.
"It's a very sad day for the city and for most of us," he said.
"Austins has been an iconic feature of city life for many years.
"It's no secret that retailers of many guises have had difficulties down through the years and Austins was not immune in experiencing that.
"I'm aware they went through some difficulties previously and restructured several years back, but it just hasn't proven to be enough."
Staff are due to meet the liquidators during the week to organise redundancy payments.
"There was a meeting first thing addressed by management and myself and, as you can imagine, it was fairly emotional," said Mr Duffy.
"It was a shock and it's a very painful process for everyone involved.
"We just want to deal with the employees as a priority and they will get paid by their redundancy payment service," he said.
One of Europe's oldest department stores, Austins, in the centre of Londonderry, has gone into liquidation.