The AfD had booked the Hofbräukeller in the Bavarian capital for a meeting featuring party leader Frauke Petry on May 13th.
But landlord Ricky Steinberg called off the event last week, saying that he feared the party might attract violent counter-protests outside his doors.
“I fear for the reputation of the Hofbräukeller and its security,” he told the Süddeutsche Zeitung on Thursday.
Now the AfD's eastern Munich branch says that it will go to court, seeking either tens of thousands of Euros in damages or the right to go ahead with the party meeting, unless Steinberg backs down.
They argue that they had already signed a contract and made an advance payment of €6,100 for the use of the venue.
Other political parties including the traditionalist, conservative Christian Social Union (CSU) and the Social Democratic Party (SPD) have regularly used the Hofbräukeller for meetings in the past.
“I'll wait for the court case to come in,” landlord Steinberg said on Sunday, adding that “my decision is definitely final”.
There is more than a touch of far-right history to the Munich beer institution, as it was the scene of Adolf Hitler's first speech as head of the German Workers' Party in 1919.
It was a significant enough event to the future dictator that he later recalled it in his manifesto Mein Kampf.
But the more famous of the dictator's beer hall speeches took place in the Bürgerbräukeller, since destroyed, where he launched the failed “Beer Hall Putsch” in 1923.
The Bürgerbräukeller was also the scene of a 1939 attempt on Hitler's life using a bomb by Georg Elser, made famous in a 2015 film.