Education Minister Trevor Mallard says Glen Innes Intermediate should be shut down this year.
The school was built during the 1960s to accommodate 400 children from the newly built suburb, but its roll now stands at 36.
Mr Mallard described his decision as preliminary, but said it would be reversed only if the school could come up with new reasons within the next 28 days for it to remain open. He said the school's declining role made its long-term viability unlikely.
"I know it is not an easy task for communities to consider closing a school, but it is important for me to take into account the longer-term interests of the young people in the area," said Mr Mallard.
Commissioner of the school Anne Hunt accepted that closure was now "inevitable", but said it would be a sad day for the community.
