Libelle Group is contracted by Compass to deliver 125,000 meals a day as part of the Ka Ora, Ka Ako programme, but its shareholders have placed the company into liquidation.
The food service provider has also offered residential catering, tuckshop solutions, and school catering services for the last 20 years.
Robert Campbell and David Webb of Deloitte New Zealand have been appointed as liquidators.
"The liquidators are undertaking a full and urgent review of all of Libelle's operations, with our immediate focus being working with Libelle's employees and affected stakeholders to ascertain the way forward, including ensuring students around New Zealand continue to receive their school lunches," Webb said.
Associate Education Minister David Seymour said it was a commercial matter between Compass and Libelle.
"Compass has assured the ministry that any disruption will be minimised, and the liquidation process will not materially impact the provision of school lunches," he said.
"To ensure the uninterrupted delivery of the school meals provided by Libelle central production kitchens, the Compass Group has told the ministry that it will assume operations during this transition and take responsibility for providing meals every school day."
The school lunch programme has been mired in controversy with complaints about inadequate and poorly prepared meals.
The School Lunch Collective, of which Libelle is a member along with Compass and Gilmours, said its priority remained ensuring the students continued to receive the meals.
"We recognise the vital role that Libelle's staff and partners play in delivering school lunches, and we are committed to ensuring the future of Libelle as part of the programme and supporting its people through this process," said the Collective's Paul Harvey.
"We recognise the vital role that Libelle's staff and partners play in delivering school lunches, and we are committed to ensuring the future of Libelle as part of the programme and supporting its people through this process."
Libelle was one of three companies in the School Lunch Collective which won the contract to provide cut-price meals to 466 schools in the free lunch scheme, Ka Ora, Ka Ako.
It has 500 staff and operates out of 15 locations.
The others were food and support services company Compass Group and food and beverage wholesaler Gilmours.
Education Ministry documents showed Libelle and Compass indicated early in last year's procurement process the government's $3 price cap for the lunches would be a stretch.
"Existing suppliers such as Libelle and Compass have expressed an interest in being part of the alternative solution, however indications are they may not be able to meet the $3 price cap," the document said.
The collective said it provided lunches for about 120,000 children a day and Libelle was contracted to provide 125,000 each day.
Libelle's website said it had been involved in school food services for 20 years.
It was a provider under the free school lunch programme and also ran school tuckshops, a school lunch delivery service, and residential catering in school boarding houses.
The site said Libelle's was a New Zealand-owned family business founded by Johannes Tietze.
It said it serviced several hundred schools and employed almost 600 people.
