Canberra microbrewery Zierholz will pursue the University of Canberra for more than $2 million in damages after negotiations broke down between the two over a failed bar venture at the uni's Belconnen campus.

Zierholz has alleged that the university approached the Fyshwick-based brewery in 2009 to work with the staff-run University of Canberra Union to operate a bar, restaurant and events venue with an expected annual turnover of more than $1 million.

The University of Canberra agreed to pay for Zierholz's liquor license, run major events at the venue and promote the bar and its products to staff, Supreme Court documents allege.

An event deed from 2011 shows that the University of Canberra and the University of Canberra Union agreed to work with Zierholz to maximise "each of their respective benefits" and establish a business relationship based on mutual trust.

Between 2012 and 2015 Zierholz operated as a bar and live music venue, winning Venue of the Year for 2013 in the MusicACT Annual Music Awards, with court documents alleging the University of Canberra Union was given a share of bar sales profits and access to the bar's revenue records.

But in May 2015, the University of Canberra and University of Canberra Union opened its own bar, restaurant and events venue, The Well, which Zierholz alleges was in direct competition with its bar and in contravention of their agreement.

The Well offered subsidised food and alcohol and the University of Canberra and University of Canberra Union used Zierholz's revenue records to their benefit, Zierholz alleges, leading to Zierholz's closure in 2015.

Zierholz will claim damages, a declaration that the University of Canberra and University of Canberra Union have contravened competition and consumer laws and costs.

Zierholz Brewery, Restaurant & Bar owner Christoph Zierholz said the family-owned business was prepared to put everything into its fight for compensation.

"We're not going to go away quietly," he said.

"It's affected us quite deeply on a daily basis. We're a young family and you find yourself yelling at the kids because you're always strung out."

The matter is expected in court in late August to early September.

A University of Canberra spokeswoman said: "This is a legal matter which will be heard before the court and the university does not propose to make any comment."