Star Beachboys Inc. — the longtime operator of a Waikiki Beach concession for surf lessons, canoe rides and surfboard rentals — has agreed to vacate its spot on the state’s most popular beach and let a new contractor take over the job.

The move comes after state Circuit Judge Dean Ochiai refused Thursday to block the city’s contract with the new concession stand vendor, Dive Oahu Inc.

Star Beachboys, the losing bidder for the new contract, had sued to block the city’s switch to Dive Oahu.

The city had given Star Beachboys 30 days’ notice to vacate by Monday but let the company remain pending Thursday’s decision on its request for a temporary restraining order.

The city said Star Beachboys’ lawyer Richard Wurdeman informed the city that his client began clearing out Wednesday afternoon and expected to have all of its belongings off the beach by Wednesday night.

Star Beachboys says the city should not have awarded a contract to Dive Oahu because its owner, Brian Benton, is not qualified to give surf lessons or captain a canoe.

“I know they’re going to fail. It’s going to be a failure, and the city, the mayor, is going to get a major black eye on this one,” Aaron Rutledge, owner of Star Beachboys, said.

Dive Oahu’s manager, Shelly Rofrits, said the company has employees with state permits to provide the surf lessons and canoe rides and is willing to hire other surf instructors and canoe captains who currently work for Star Beachboys as independent contractors.

“We’re here to provide beach services for the community and that we will employ all of the local beachboys. All of the current employees, anyone who wants to apply at the beach, they are more than welcome to do so,” Rofrits said.

Rutledge said Dive Oahu will pay beachboys less for providing surf instructions and canoe rides and that a change from the current arrangement threatens to end the Waikiki beachboy tradition.

Rofrits says beachboys will actually get paid more as employees and receive benefits they currently don’t have.

Ochiai gave Star Beachboys, the city and Dive Oahu 10 days to each submit a proposed written order for him to sign denying a temporary restraining order. Ochiai could sign one of the proposed orders or draft his own.

Dive Oahu won five-year city contracts for two beach stands. Hawaiian Ocean’s Waikiki continues to operate the other stand even though its city contract expired. Hawaiian Ocean’s is not a party to Star Beachboys’ lawsuit.

The city’s top lawyer, Corporation Counsel Donna Leong, said the city had asked Hawaiian Ocean’s to leave by this past Monday and will issue the company a notice to vacate.