The leadership of St John's, Nottingham, has decided to call time on the historic institution after coming to the conclusion that it is "no longer financially viable in the long term".
The difficult decision was made at a meeting of the college council on 11 November.
"Future options were prayerfully considered and it was agreed that the operation of the current configuration of St John's is no longer financially viable in the long term," said council chair Chris Smith in a statement this week.
"St John's will therefore begin the process of closure now."
The college said that several "significant aspects" of its ministry would continue through partner institutions, with the Midlands Institute for Children Youth and Mission to merge with the Institute for Children Youth and Mission in Leicester.
The institute's library, which holds around 10,000 books, is also being gifted to iCYM.
Further talks are underway with the Queen's Foundation in Birmingham to acquire the Extension Studies department that runs the college's distance learning and is responsible for degrees validated by the University of Durham.
Mr Smith said that negotiations with both iCYM and the Queen's Foundation were "well advanced".
"St John's Council has every confidence that Queen's will support and develop the current provision professionally," he said.
"All other key partners are fully informed of this development and work is in hand to ensure that the transition progresses smoothly.
"St John's is impressed at the warmth and care with which negotiations with Queen's have progressed. Current students and staff have been informed of this, and are assured that their courses will continue until they have completed them."
Discussions are taking place with the Diocese of Southwell and Nottingham, and St Mellitus College, East Midlands, to provide a new home for the rest of the college's library.
The college said it wanted St John's Library to stay in Nottingham.
"The hope is that it remains a regional resource," it said.
A closing service for St John's will be held in summer 2020.
Commenting on the announcement, Chair of St John's College Council Chris Smith said: "Generosity has always been a core value of St John's College and in this spirit we are pleased to share the wealth of knowledge and resources we have created for the benefit of the Christian community, and honour the work of our past students and staff who have worked hard to deliver on our mission."
David Hewlett, Principal of the Queen's Foundation, said: "We are glad to be able to continue the vital work of making theological education as widely accessible as possible through distance and online learning.
"We share St John's pioneering spirit and are grateful that the St John's Trustees have seen fit to find a new home for this work in Queen's."