Miriam High Special Needs Unit will close its doors for good in September under the guidance of Port Augusta City Council.
"It's not an easy decision for this current council to make, and they have had to make quite a few lately, but there's other things that have been put in place that impact what we can and can not achieve," Mayor Brett Benbow said.
"Miriam High was being reviewed, no less than childcare and city safe and a number of other aspects, but then NDIS came on board as well so that's what has had the most impact."
Amid the introduction of the NDIS, the disability sector has undergone significant change; Miriam High Special Needs Centre traditionally received block funding from several sources.
However under the new initiative, block funding is being phased out and individualised funding per client has been introduced.
The number of clients attending the centre has also significantly reduced and it has been struggling to fit into NDIS approved support clusters.
"We understand the sensitivity of what's occurring in this area," Mr Benbow said.
"We do feel for the families and the staff who are very passionate and who have done their job over many years to assist these people and the children's growth."
There are nine children currently attending the centre during school term periods with a further four children enrolled to attend school holiday programs.
Only three children who attend the centre during school term periods have NDIS assistance to fund their attendance.
Some of the children will attend programs at the Port Augusta Children's Centre as part of a transition plan.
The future of the Child Care Centre attached to Miriam High also remains uncertain as council continues its service level review.
"The childcare centre will continue to operate but that will be another review going forward along with a number of other services," Mr Benbow said.
"All of the services we operate will actually be reviewed and we will work through that one when we get to it."
Operations at Miriam High will cease on September, 30 and the building will be put up for sale.