The sixth form at Halewood Academy in Knowsley will shut in August 2017 after the Department for Education agreed it could stop providing A-levels.
Principal Gary Evans said it was "sad" but left the academy in a stronger financial position.
Education chiefs pledged to get an another A level plan in place by 2017.
Mr Evans said: "We shall continue to work extensively with other post-16 providers to ensure that all of our students remain in education or training once they leave the academy.
"Discussions are also taking place for a future potential post-16 joint venture across Knowsley," he said.
Knowsley has the lowest proportion of students taking A-levels in England at 2% and has among the lowest university entry rates in England.
A letter to the school from parliamentary undersecretary of state for schools, Lord Nash, outlined the plan.
He said after considering the quality of provision, the impact on existing students and the availability of post-16 education in the area  "I have agreed their request to close the sixth form".
Knowsley councillor Gary See said the local authority was "naturally disappointed with this outcome" but pleased there was "some clarity for the Academy and its students".
He said due to the school's academy status, the council had "no powers to intervene" but had committed to working with the government to establish "new sixth form provision from September 2017".
Parents at the school had protested against the closure, arguing it "is letting down the children of this community" and could block their ambitions.
Students who are part-way through their studies will be able to continue at the sixth form.

The 27-year-old Commonwealth Games silver medallist was badly injured in a motorbike taxi accident in Vietnam.
Earlier this week she was flown back to Scotland and is in hospital in Edinburgh.
In a Facebook message posted by a friend, Stephanie also said "can't wait to get home and have a Nando's".
On Thursday, her parents said she had opened and her eyes and said "Hi".
In a further update, on the SaveSteph facebook page, a friend said the judo star had made "outstanding progress" and was eating and drinking small amounts by herself and fully able to communicate.
"Hopefully next week she will be moved to a rehab centre and continue her progress," the statement said.
In her message dictated to her friend, Stephanie said: "Tell everyone thank you for all their support and well wishes, I am going to be up and about before you know it and come and see everyone and can't wait to get home and have a Nando's.
"Thanks everyone for the cards flowers and trinkets that you have sent."
The 27-year-old, who grew up in the Highlands but has been living in Dunfermline, was flown back to Scotland from Thailand after being treated in a Bangkok hospital for a serious head injury and also infections, including pneumonia.
Doctors in Vietnam had given her a 1% chance of surviving her injuries.
Her parents, who live in Daviot, near Inverness, flew to south-east Asia to be with their daughter.
Stephanie, who won her Commonwealth Games medal at Glasgow 2014, had been in Vietnam for about four months, teaching underprivileged children, when the motorcycle accident happened last month.
Her skirt is believed to have become unravelled and caught in the wheel.
Friends and family set up a crowdfunding campaign to pay for her medical costs after it emerged her travel insurance was not valid because she had been in the country more than 31 days.
A Merseyside borough will have no A-level provision after the government approved the closure of the area's only sixth form offering the qualification.
[NEXT_CONCEPT]
Scots judo star Stephanie Inglis has thanked her supporters and said she hopes to be "up and about" soon.