Parents were contacted by letter and told the pre-school would close on the 17 July 2017, which Blanchelande principal Andrew Warren said meant current pupils would be unaffected.
'We are giving a complete year's notice and our current students will not be affected,' said Mr Warren.
'We have got in contact directly with parents and prospective parents, and we're disappointed to have to make this decision, but it just isn't viable to continue.'
Mr Warren attributed the decision to the nursery school entitlement scheme, which starts from 1 January 2017.
