A number of city institutions, including R W Forsyth department store on Princes Street, the Ritz Cinema on Rodney Street and jewellers Abbott of Greyfriars, were to disappear for good.
But it wasn’t all doom and gloom.
A fancy new cocktail bar, Charlie Parker’s, opened up on George Street, the Edinburgh Fringe was more popular than ever and the entire city went Royal Wedding daft to celebrate the marriage of Princes Charles and Diana Spencer.
In sport, there was success for Scotland at Murrayfield against Australia, while ex-Man Utd and Hibs star George Best brought his glamorous new team, the San Jose Earthquakes, to Easter Road.
We’ve had a deep dig through the archives at the Evening News to bring you 17 memories of Edinburgh in 1981.
9. Hearts photoshoot 1981
Hearts football team photoshoot at Tynecastle in July 1981, before the 1981/82 season - Jim Jefferies, Willie Gibson and John Robertson. Photo: Jack Crombie
10. Ritz cinema 1981
Exterior of the Ritz cinema in Rodney Street Edinburgh. The last film shown was on November 28th 1981 with Exorcist II and Mad Max. The building was demolished in 1983. Photo: George Smith
11. Milk lorry sheds load 1981
Men clearing up after a milk lorry shed its load of milk bottles and cartons in Semple Street, September 1981. Photo: Stan Warburton
12. Henry Robb sign 1981
The sign above shipbuilders Henry Robb Ltd shipyard at Leith docks, November 1981. Photo: Alan Ledgerwood