Chepstow Magistrates Court is one of 12 in Wales facing the axe, but Abergavenny has escaped closure.
Jonathan Djanogly, the Parliamentary Under Secretary of State for Justice, announced which courts would be closing and which would be retained following a government consultation.
Monmouth AM Nick Ramsay, who has been lobbying to keep Abergavenny Magistrates Court open, welcomed the news but added that he was disappointed that Chepstow would be one of 12 magistrates courts and four county courts in Wales to close.
The closures mean there will be 26 magistrates courts and 18 county courts left to serve the justice system in Wales.
They will be implemented in a phased programme starting in April 2011.
The consultation revealed that many of the courts facing closure in Wales failed to provide suitable facilities for victims or witnesses, had either no or insecure facilities for prisoners or were not built for the needs of a modern courthouse.
Mr Ramsay said: "I am delighted that the work we have put into saving Abergavenny Magistrates Court has been successful.
"At the same time, it is disappointing to hear that the Chepstow courts are set to close.
"This is a regrettable decision and I will be contacting the Home Office to ask if this decision has to go ahead.
"Everyone accepts that in the current economic climate, changes had to be made and it makes sense to rationalise court services, but at the same time people need to know that they can have access to justice as locally as possible and I will be fighting to make sure this is the case for people in Monmouthshire."
Responding to the announcement, David Davies told Parliament he was "deliriously happy" and thanked Mr Djanogly for "listening to the arguments that I and the people of Monmouthshire put forward to save Abergavenny court from closure".