Tresham bosses have confirmed Wellingborough will not be getting a new campus amid talks of a possible merger with another college.
Tresham College, which also has campuses in Kettering and Corby, has said it is not going ahead with its plans to build a new campus in Wellingborough.
It comes as the college is discussing a possible merger with either Northampton or Bedford College.
The choice of which college will be invited to merge with Tresham will be made early in the spring, with the possible merger date of August 1, 2017.
Interim principal at Tresham Ioan Morgan CBE said: “Many colleges in England are considering merging with strong partners and we are doing the same.
“Collaboration is the way forward to ensure high quality courses and a sustainable future.
“Any merger will only have positive benefits for our students.
“Our outstanding campuses at Kettering, Corby and Silverstone will be kept open as they are modern and popular with learners.”
Tresham was given an inadequate rating by Ofsted earlier this year.
Since then, the Government has put in place an area review of further education and it has been recommended that Tresham College needs to improve its Ofsted grading and its financial performance.
On the proposed Wellingborough rebuild, Mr Morgan said: “Due to our financial issues, it has been decided not to proceed with our new build at Wellingborough and, after our current group of 60 motor vehicle learners complete their qualification, future provision will be at our excellent campus in Corby.
“The site at Wellingborough, which we own, will be partially demolished and it will be a joint discussion with our merger partner as to what will be developed on site.
“We will of course involve other stakeholders, such as the local council, in our deliberations.”
A letter written by Mr Morgan and seen by the Northants Telegraph says those currently studying at Wellingborough will be the last to occupy that campus as it is demolished and cleaned of asbestos.
It is likely that the site will then be offered for sale.
Following today’s news, leader of Wellingborough Council Cllr Martin Griffiths said: “I am very disappointed as we were looking forward to a brand new college on a key site in our town centre and it is upsetting for the students of our borough who will have to continue to travel to Corby and Kettering to complete their training.
“With housing growth in our borough taking place in the coming years there will be an increased demand for further education and apprenticeships and I have spoken with our MP Peter Bone and my colleagues at SEMLEP to work with the local colleges to find a long term solution.
“I am somewhat surprised that decisions seem to have been taken by Tresham without any detailed discussions with myself and senior officers of the council.
“I look forward to a meeting with all parties in the very near future as I am not happy to leave such an important site undeveloped for a long period of time.”
Tresham provides education for more than 4,000 students in the area.