Updated 8.33pm: Iconic Wellington department store Kirkcaldie & Stains is to become a David Jones store next year.

Kirkcaldie & Stains directors are to recommend to their shareholders that they vote to sell the Kirkcaldie & Stains brand, and assign the lease of the Lambton Quay store to David Jones, the leading Australian retail brand.

As part of the proposed deal, David Jones intends to provide the opportunity for employment to most of the current staff.

Kirkcaldie & Stains chairman, Falcon Clouston, believes the decision is in the best interests of the company, staff, customers and Wellington.

"The end of Kirkcaldie's, as a much loved Wellington department store, has been a difficult one to make."

"But we believe it's in the best interests of the company, our staff, our customers, and Wellington."

The deal is subject to a shareholder vote a meeting next month, and if approved, Kirkcaldie & Stains will close in late January.