Wolverhampton Council's licensing committee revoked The Talisman's licence after hearing about criminal activity stretching back years.
A special meeting was held to decide the pub's fate after it was temporarily shut following a police raid on December 6, when officers found scenes of disorder and serious criminal activity.
It was the second time in two years that the pub on The Scotlands estate has been closed.
The licence-holder, Star Pubs & Bars, argued that The Talisman, in Wildtree Avenue, was a community asset.
But the council's committee decided to revoke the license after police warned of the 'negative impacts' on the local area if the premises remained open.
Sergeant Steph Reynolds told the committee: "There has been blatant drug taking and stolen property at the premises.
"An organised crime gang, now in its third generation, was operating from the pub.
"Police feel revoking the license will not only benefit the police in terms of stopping criminal activity, but also benefit the wider community which have suffered from this.
"Should the premises remain open, police feel these offenders will return."
Police previously raided the pub in 2016 where officers seized crack cocaine, digital scales and several bags of cannabis.
Police discovered The Talisman was at the heart of an organised drugs ring. It was closed after the raid.
But the community objected to this and sent in dozens of letters to Wolverhampton Council.
They called the Talisman a 'community pub'.
The Talisman was allowed to reopen after a license review by Wolverhampton Council.
But the former licence-holder, Punch Taverns, was forced to bring in tougher measures to combat crime.
Bosses had to install CCTV, use ID checks and train staff regularly.
But criminal activity continued on the pub's premises.
This was uncovered by police during an undercover operation where officers found people were selling illegal drugs and stolen goods.
The sting was followed by a police raid last month.
It then prompted police to ask Wolverhampton Council for another license review of the pub.
At the meeting, Star Pubs & Bars, which took over earlier this year, argued that the pub should stay open as it was a community asset.
Barrister Duncan Craig, representing the firm, argued that the vast majority of its customers were good citizens.
The pub also planned to install a new supervisor with a vision of turning its fortunes around.
Mr Craig told the meeting: "This pub is in a challenging part of Wolverhampton. Drugs are a feature on the estate and there are is a number of social issues.
"These are bound to permeate to that [the pub]. What we have to ask ourselves is, can a pub be a force for good? Absolutely it can."
But the committee decided to revoke the pub's license in the interest of public safety, after hearing evidence from police.
Sarah Hardwick, solicitor for Wolverhampton Council's licensing committee, concluded: "The committee's decision is to revoke the premises' license.
"[Police] discovered at the premises large amounts of class A drugs being dealt and a large amount of stolen goods stored and sold from the premises.
"There is evidence of organised crime."
Councillor Wendy Thompson, a panel member, told the Express & Star: "The police put forward evidence that there had been issues which caused them concern and therefore the committee took the decision to revoke the licence."
In order for the pub to reopen, a new licence will need to be applied for.
A spokesman for Star Pubs and Bars said: "The Talisman is leased to an independent business person to run as their own.
"We only acquired the pub in March this year from Punch Taverns. We are disappointed by the outcome of the licensing committee hearing.
"We will take time to consider the decision and consult with all relevant parties in order to agree a possible way forward for this community pub.”