The ministry is forcing George Street Normal School to reduce its roll from 450 pupils to 350, by way of demolishing eight classrooms and only funding the replacement of three.
The school’s board had been fighting to keep its roll and number of classrooms since late last year.
However, last week parents were told in an email from the school’s board of trustees that dropping to 350 pupils was its only viable outcome.
The letter said a lawyer had advised the only option left to fight the move was a judicial review, but this would cost an "unreasonable amount of money" and would likely be unsuccessful.
Chairwoman Holly Hammond told the Otago Daily Times the board was disappointed it had been forced to accept the ministry’s decision.
She said the school’s preferred option would have been to keep the number of classrooms it had.
Ms Hammond said parents were disappointed and anxious.
"It’s not something we would choose and it’s not something we would do naturally; it’s something we are being required to do."
She said the school would not reduce its roll overnight and it would be a managed process after a decision had been finalised.
"So, it’s school as usual. We’re still accepting enrolments, no-one’s place is under threat, no-one will be asked to leave the school."
The letter outlined that if it got to the stage where the school had to reduce its roll, it would be done through a balloted process and in-zone pupils would be given preference.
The school had been in consultation with the ministry for the past three years and had left "no stone unturned" when considering options.
The school was initially told the ministry would help build four new teaching spaces in November last year.
However, in February it was told the ministry would only help fund three new teaching spaces.
As part of the demolition, the school would be losing its music room.
The after-school and before-school care programme "Georgies" would remain, however its designated classroom would also be demolished.
Ms Hammond said the school would have to keep "thriving with the resources we have".
The ministry had presented the school with three options, which all involved reducing the roll to 350.
The options included demolishing the junior wing - which is on the opposite side of George St to the main site - and consolidating the school on one site or building new classrooms in place of the old junior wing.
Ministry of Education South leader Nancy Bell said it was working with the school on property solutions due to the condition of some of its existing buildings.
She said it needed to consider a range of factors and invest wisely.
The factors included population change predictions and the school’s in-zone roll and the capacity of other local schools to accommodate local pupils.
Ms Bell said all enrolment schemes must adhere to the requirements in the Education and Training Act 2020 and the ministry could not make exceptions for George Street Normal School.
